Allstate Accuses Chiropractors Of Fraud, Kickbacks

Feb. 06--PROVIDENCE -- Allstate Insurance Company is suing a Providence chiropractic office, accusing its owner of falsifying medical records to boost insurance claims and of paying kickbacks to the personal injury lawyers referring clients.

In a lawsuit filed in U.S. District Court, Allstate alleges that Arianna Iannuccilli submitted false bills seeking payment for chiropractic treatment that was never provided and, if it was, was medically unnecessary. Also named as defendants are Arianna Iannuccilli D.C. Inc., Kiara M. Capaldi and Amy M. Malek. All three women are licensed by the state, with no disciplinary actions against them.

A phone call to Iannuccilli's Elmwood Avenue office was not returned. Capaldi and Malek also did not return calls.

Allstate alleges that the chiropractors knowingly and collectively engaged in an insurance fraud scheme in which personal injury lawyers referred patients to Iannuccilli's clinic when they did not actually need treatment in order to boost settlement demands. The clinic reached "strikingly similar" diagnoses and treatment plans for most patients, regardless of the alleged cause of the injury or the patient's age or medical history.

The complaint accuses Iannuccilli of paying kickbacks to personal injury lawyers in Rhode Island in exchange for referrals. It does not name the personal injury lawyers alleged to be involved. Nathan A. Tilden, a Boston lawyer representing Allstate, declined to comment.

"The defendants unlawfully obtained patients who did not otherwise need medical treatment via their improper relationships with Rhode Island personal injury attorneys," the lawsuit says.

Other allegations include that the defendants found almost every patient to be partially or fully disabled as a means of exaggerating injuries to increase the insurance reimbursement. Allstate alleges that most of the patients were involved in minor "fender-bender" accidents, but chiropractic care needlessly persisted without discharge for months. Fabricated medical records were then submitted by lawyers and factored into settlement demands, the suit says.

Allstate also accuses Iannuccilli, Capaldi and Malek of billing for significantly more time than they actually spent with the patients. In addition, Allstate alleges a "pervasive" pattern of billing for services that were not provided.

The full scope of the misrepresentations was not known until the insurance company launched an investigation, the complaint says. The company interviewed multiple patients, some of whom reported never being comprehensively examined, according to the lawsuit. It alleges it has paid in excess of $755,253 to Arianna Iannuccilli D.C. Inc. since 2010 related to the purported scheme.

The company charges that the chiropractors violated the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, engaged in fraudulent misrepresentation and conspiracy, and unjust enrichment. It seeks unspecified damages.

In addition, the company accuses Iannuccilli, Capaldi and Malek of violating the Rhode Island chiropractic regulations by engaging in unprofessional conduct.

The state Department of Health does not comment on ongoing investigations and could not confirm whether a probe was under way, spokesman Joseph Wendelken said.

Wendelken noted that, generally, when an issue becomes a legal matter the agency lets that process run its course before it starts an investigation.

Amy Kempe, spokeswoman for the attorney general's office, referred questions to the Department of Health.

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