Allstate Files $6.6 Million Fraud Lawsuit Against 47 DME Providers

Allstate Insurance Company is seeking to recover $6.6 million in treble damages against 47 New York durable medical equipment (DME) suppliers and their respective individual owners in the company’s 4th insurance fraud lawsuit of 2013. 

The lawsuit alleges that these 47 DME providers—31 retail and 16 wholesale companies—submitted or facilitated the submission of fraudulent billing documents to Allstate for reimbursement under New York State’s No-fault Law. 

Commonly associated with automobile insurance, the no-fault law is a type of insurance contract under which policyholders are compensated for losses under their own insurance company.

The lawsuit also includes 28 and 5 individuals, who allegedly owned one or more of these retail and wholesale companies accused of taking advantage of New York’s insurance law and costing New York taxpayers millions of dollars year-after-year, according to the Insurance Information Institute. 

“In essence, honest hardworking New Yorkers are paying a ‘fraud tax,'” said Allstate spokeswoman Allison McMahon. “We need lawmakers to enact meaningful insurance reform that puts the citizens of New York first.”

Since 2003, Allstate has filed 48 fraud lawsuits in New York State seeking more than $237 million in damages. 

The company is joined by other insurers and many New York State leaders in its pursuit for comprehensive reform of the no-fault system. 

“The no-fault system is being exploited and responsible citizens are the victims,” McMahon said. “Without the support of lawmakers, incidents of fraud will continue to increase. We need to work together this legislative session to fix the broken no-fault system.”

Written by Jason Oliva

Jason Oliva

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