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Letter to the Editor

Allstate New Jersey and Encompass Insurance Lawsuit Alleges Central NJ Medical Practitioners Bilked Companies Out of Millions of Dollars

Since 1993, Allstate New Jersey and Encompass have paid more than $17 million to the defendants. The legal action seeks restitution of all monies paid in violation of New Jersey statutes and regulations governing the delivery of health care, and also seeks treble damages. The suit also asks the court for a declaratory judgment against the medical practitioners in order to halt all claims being made by Drs. Greenberg, Brownstein and Sorin and the professional entities controlled by them.

Allstate New Jersey and Encompass continue to receive claims from the defendants.

The Allstate New Jersey-Encompass Insurance lawsuit alleges that Greenberg orchestrated a referral scheme to defraud the carriers. Specifically, the complaint accuses Greenberg of illegally self-referring his chiropractic patients to Middlesex Diagnostic Associates, the mobile diagnostic facility in which he was the sole owner. In New Jersey, it is illegal for a chiropractor to own a diagnostic facility. After Greenberg closed Middlesex Diagnostic, he referred his patients to Neuro Muscular Medical Group, a diagnostic facility owned by Sorin. However, investigative research indicates that Neuro Muscular Medical group's patients consisted almost exclusively of Greenberg patients.

As alleged in the complaint, through a service agreement between Greenberg and Sorin, billing was exclusively done by Greenberg's Accurate Billing Company. The terms of that agreement allowed Accurate Billing to keep 30 percent of the Neuro Muscular Group's monthly gross income. The lawsuit contends that the 30 percent amount was a kickback from Sorin to Greenberg in exchange for the patient referrals. The lawsuit asserts that Greenberg in fact illegally employed Sorin in order to evade the regulations that require diagnostic facilities to be owned by plenary licensed physicians.

The complaint also addresses the fact that check payments from Brownstein's Brunswick Imaging were received by a medical marketing facility in connection to two of Greenberg's chiropractic facilities. The suit alleges that those checks were part of a referral and kickback scheme.

Allstate New Jersey and Encompass Insurance also allege that Greenberg has permitted unlicensed assistants to administer physical therapy treatment in violation of New Jersey law and regulations. That is particularly egregious in that it places the health and well being of patients at risk. Greenberg's chiropractic clinics are located in Elizabeth, New Brunswick, North Plainfield, Perth Amboy and Trenton.

Additionally, the complaint asserts that Greenberg routinely fails to collect the statutory personal injury protection (PIP) co-pay and deductible from his patients. The failure to collect co-pay and deductibles is an indicator that the treatment and testing may be unnecessary, the lawsuit alleges.

Edward J. Moran, assistant vice president for Allstate Insurance Company's Special Investigations Unit Division (SIU), said that the doctors' businesses continue to be investigated by Allstate New Jersey. Because insurance fraud is difficult to detect and must be proven in court, Moran pointed out that it can take some time to find those involved in the fraud, sort out all the facts and present a case.

Richard C. Crist, Jr., President of Allstate New Jersey, said, "Allstate New Jersey believes that the fight to rid the system of insurance fraud is a crucial one, and it continues daily. It is especially disturbing when doctors and others in the medical profession have allegedly violated their public trust." He continued, "People place their faith in medical professionals and they should be protected from those who violate the law."

Crist added, "The fact that can not be overlooked is that auto insurance fraud is not a victimless crime. It impacts everyone's car insurance costs."

Allstate New Jersey Insurance Company, headquartered in Bridgewater, NJ, was established in 1997 by the Allstate Insurance Company as a separate and distinct company to service the unique needs of consumers in the New Jersey insurance marketplace. Allstate New Jersey is a major provider of auto, home and commercial insurance products. Allstate Insurance Company is no longer licensed, and does not write business, in New Jersey.

Formerly CNA Personal Insurance, Encompass was launched in September 2000 as an insurance brand with more than 20 years of relationships established with independent agents and their customers. Encompass, as part of the Ivantage Group, a division of The Allstate Corporation, is a brand devoted exclusively to independent agents, selling automobile, homeowner and related insurance to 1.2 million customers through a network of more than 3,400 independent insurance agents.

Allstate is the nation's largest publicly held personal lines insurer.

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