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Allstate wins $7 million 'falsified' X-ray report lawsuit

by Brendon Nafziger, DOTmed News Associate Editor | December 11, 2012
Allstate Insurance Co. said Tuesday it won a $7 million lawsuit against a Los Angeles area chiropractor the insurer accused of submitting hundreds of "falsified" X-ray reports.

According to a judgment handed down by Los Angeles County Superior Court Judge Ernest M. Hiroshige, Daniel H. Dahan and his business, Progressive Diagnostic Imaging Inc. of Long Beach, fell afoul of California's insurance fraud act in 487 claims submitted to Allstate that the court deemed "falsified medical records," the insurance company said.

Allstate accused Dahan of soliciting X-rays from chiropractors, allegedly claiming the X-rays would be interpreted by "board-certified radiologists." But Allstate claimed the scans were actually processed by "reporting-writing" software that supposedly was able to render diagnoses and was run by unlicensed technicians.

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"To make it appear that the reports were genuine, Dahan instructed his 'technicians' to cut and paste the signatures of board-certified radiologists to the reports, all without the knowledge, approval or authorization of the radiologists," Allstate said in a press release.

Four radiologists at the trial testified to not being involved in the reports where their names appeared, Allstate said. Allstate said the patients and health care providers using Progressive Diagnostic Imaging were not aware of how the reports were generated.

Allstate said the judge ordered Dahan to pay the company $4.87 million in civil penalties, more than $900,000 in assessments and $1.22 million in attorney's fees and expenses. In addition, the court issued an injunction against Dahan forbidding him to work in medicine again. Letters were also to be sent out to affected patients and providers, notifying them of the court's ruling and advising them to disregard the reports from Dahan's company.

"Insurance fraud is not a victimless crime," Phil Telgenhoff, Allstate's California field vice president, said in a statement. "Fraud drives up the cost we all pay for insurance and stealing millions of dollars from insurers cannot and will not be tolerated in California or anywhere across the country."

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