Fraud Lawsuit Filed Against 46 Minn. Chiropractic Clinics

MINNEAPOLIS (WCCO) -- A federal lawsuit filed Monday in Minneapolis' U.S. District Court claims 46 Minnesota chiropractors engaged in an illegal kickback scheme and possible violations of the federal racketeering laws over six years.

The lawsuit names 46 chiropractors and a mobile diagnostic imaging company.

"The lawsuit basically says the mobile MRI facility was paying some sort of rent to these clinics. In reality this rent was really just a kickback for providing patients to MRI facility," said Mark Kulda, Vice President of Communications for the Insurance Federation of Minnesota.

IFM, President Bob Johnson says the lawsuit highlights Minnesota's growing problem of insurance fraud. The National Insurance Crime Bureau shows Minnesota led the nation in increased organized criminal activity in auto insurance fraud.

"Insurance fraud is a problem everywhere," said Kulda. "We have a particular problem in Minnesota because we are a no-fault state."

Only nine states in the nation are no-fault states. Minnesota's No-Fault Automobile Insurance Act passed in 1974. Kulda says the no-fault laws are so weak that organized criminals are preying upon unsuspecting citizens, and some criminals come from other countries.

"We know organized criminals from other countries are active in the Twin Cities," said Kulda. "They own chiropractic clinics, they're staging accidents, they're submitting bills on behalf of people who weren't even hurt, they're charging for treatment that was never even rendered, and this is costing millions and millions of dollars to Minnesota consumers because our premiums keep going up."

Statics provided by IFM show the average Minnesota family pays about $1,400 a year in higher premiums due to fraud.

A Senate Commerce Committee has begun public hearings on what could be done to resolve the problem.