From the Globe and Mail – Dec.17th, 2010

Insurer alleges Toronto-area medical clinics bilking system


December 17, 2010

State Farm Mutual Automobile Insurance Company has launched a lawsuit against a group of Toronto-area medical clinics alleging that they were set up to defraud insurers.

The suit, which was filed in the Ontario Superior Court this week, is a watershed moment for the insurance sector in Canada. Insurers have long been seeking to demonstrate that clinics have been established to bilk the system, but assembling such a case has proven to be difficult.

In its statement of claim, State Farm alleges that it has paid out at least $1.2-million that it knows of for medical services that were not actually provided.

“Further, State Farm has paid income replacement benefits, housekeeping benefits, and caregiver benefits based on false disability certificates, on which it reasonably relied,” the company said.
The Globe and Mail

It alleges that Vishnukanthan Sabapathy of Scarborough, Ont., was the de facto owner or manager of the group of clinics who were sending false treatment plans, disability certificates and invoices to State Farm since at least July, 2008. Those clinics include McCowan Rehabilitation Clinic, McNicoll Injury Management, Ontario Rehab Center and Care Plus Active Rehabilitation.

Mr. Sabapathy could not be reached for comment. None of the allegations have been proved.

“The clinics were held out to State Farm as legitimate service providers, when in fact they were vehicles for the personal defendants’ wrongdoing,” the statement of claim alleges.

Treatment plans, disability certificates and invoices were fraudulently submitted by the clinics that carried the purported signature of medical professionals who did not actually work for the clinic at the time, it alleges. It names six chiropractors, a kinesiologist and a registered massage therapist whose signatures were allegedly used.

“Treatment plans and disability certificates have been and are still being filled out by the clinics and personal defendants and signed in the name of health practitioners who either never worked at that particular clinic or who left that particular clinic prior to the date of the treatment plan,” the company said.

For example, it says that Nasim Husnani, a chiropractor, worked at Ontario Rehabilitation Centre for about two months, from October, 2009 to November, 2009, but State Farm received treatment plans and disability certificates that were purported to have been signed by Ms. Husnani after November, 2009. In addition, although Ms. Husnani never worked for companies called McCowan Rehabilitation Clinic and Physiotherapy Clinic, treatment plans, disability certificates and invoices for chiropractic services were received from the clinics bearing her signature.

Investigators recently uncovered Project 92, believed to be the largest ring of staged accidents uncovered in Ontario, costing more than $10-million. Patients allegedly faked car crashes, then billed for fraudulent treatment at Toronto clinics.