Lawsuit alleges kickback scheme

Published 9:47 am Tuesday, October 15, 2013

By Associated Press and Albert Lea Tribune

Insurance company sues 46 Minnesota chiropractors, claiming fraud

MINNEAPOLIS — A federal lawsuit accuses a diagnostic imaging company and 46 chiropractors of engaging in an elaborate kickback scheme aimed at defrauding Minnesota’s no-fault insurance system.

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Named in the 56-page lawsuit is Albert Lea chiropractor Douglas Edwards of Albert Lea Chiropractic.

Illinois Farmers Insurance and its subsidiaries filed the $1.9 million lawsuit Monday against Mobile Diagnostic Imaging Inc., its owner and the chiropractors.

The Insurance Federation of Minnesota says it’s the largest no-fault lawsuit since the state’s law was put in place in 1974.

The law requires insurance companies to pay a minimum of $20,000 for medical expenses regardless of who is at fault in an auto accident.

The insurance companies allege that Edina-based Mobile Diagnostic Imaging and its owner, Michael Appleman, paid 46 chiropractors kickbacks for ordering MRIs, which Farmers claims were not always medically necessary.

Appleman declined to comment.

Edwards said he was unaware of the lawsuit but was aware of the controversy.

“When we first heard there was a problem with this thing, we quit right away,” he said. “That was two years ago.”

Insurance Federation of Minnesota President Bob Johnson said the “lawsuit filing affirms what we’ve been telling lawmakers over the past two years — that insurance fraud is quickly growing in Minnesota”

He said the no-fault insurance act has been left unchanged and lacks important consumer protections. He seeks changes in 2014.