15 Allstate Complaint

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

D. M. ROBINSON CHIROPRACTIC, S.C. and M. W. WIDOFF, D.C, P.C., individually and on behalf of all others similarly situated, Plaintiffs, v. ENCOMPASS INSURANCE COMPANY OF AMERICA, ALLSTATE CORPORATION, and MITCHELL INTERNATIONAL, INC.,

Defendants.

Case No. 1:10-cv-08159 Hon. Rebecca R. Pallmeyer JURY TRIAL DEMANDED

(CORRECTED) FIRST AMENDED CLASS ACTION COMPLAINT

Plaintiffs D. M. Robinson Chiropractic, S.C. and Marc W. Widoff, D.C., P.C.,

individually and on behalf of all others similarly situated, through undersigned counsel, alleges

for its Class Action Complaint, upon personal knowledge as to itself and its acts, and as to all

other matters upon information and belief, based upon, inter alia, the investigation made by its

attorneys, as follows:

INTRODUCTION AND BACKGROUND

1. This is a proposed class action against the Allstate Corporation (“Allstate”) and

Mitchell International, Inc. (“Mitchell Medical”) challenging their fraudulent scheme to depress

reimbursements for medical treatment provided to Allstate policyholders through Allstate’s use

of Mitchell Medical’s “Decision Point” computer “fee review” software. The participation of

Mitchell and Allstate was essential to the scheme, and both participated in the scheme by

exercising direction and control of the enterprise.

2. Mitchell sells “Decision Point”, which is a computer “fee review” software that is

riven with errors in both the underlying data used as well as with the computational algorithims

Case: 1:10-cv-08159 Document #: 77 Filed: 05/04/12 of 52 PageID #:2445

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and computer code that is applied to analyzing the already flawed underlying data. It is a

“garbage in, garbage out” product – a fact well known to Mitchell as the seller and Allstate as the

purchaser.

3. Decision Point uses an “analysis engine” which purports to make medical

treatment reimbursement determinations by analyzing the Ingenix medical fee database, which

has been found by the New York Attorney General’s investigation to be suffused with fraud:

As a wholly-owned subsidiary of UnitedHealth, Ingenix has a conflict of interest in preparing schedules that are supposed to fairly reflect the market. Other subsidiaries of UnitedHealth, and many other insurers, use these schedules to determine reimbursement rates for consumers. Health insurers also have an incentive to manipulate the data they submit to Ingenix so as to depress reimbursement rates based on the data pool, which forces consumers to pay more. Moreover, the Ingenix databases are a “black box” to the consumer, who does not know before choosing a doctor what reimbursement rate to expect from the insurer. Our investigation has shown that . . . . the Ingenix databases understate market rate by up to 28 percent across the state. This translates to at least hundreds of millions of dollars in losses for consumers over the past ten years across the country. . . . [Insurance companies] pretend an independent database underlies these rates — it does not. Our investigation found that the Ingenix schedules themselves, created in a well of conflicts, are unreliable, inadequate, and wrong — usually at the expense of the consumer.

This lawsuit challenges the legality of the enterprise that has proliferated the use of the Ingenix

database in the context of the automobile insurance market and has unlawfully profited from its

massive, fraudulent, under-reimbursement scheme.

4. This lawsuit is not a challenge to all forms of computerized fee review of

insurance claims. Properly designed, such computerized review can and does speed up

reimbursement determinations with accuracy and with lower overhead than would manual

review. Instead, this lawsuit challenges the sale and use of a specific software programs

incorporating the aforementioned Ingenix database which has “cooked the books” through

conflicts of interest, selective data contribution, flawed algorithms and data scrubbing


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techniques. A properly constructed database for reasonable charge determinations is entirely

feasible, as are data analysis engines, but such a database and analysis software was not in the

interests of the insurance companies because they would have to make more time consuming

determinations of proper reimbursement and reimburse more.

5. Indeed, as part of the settlement with the New York Attorney General, United

Healthcare, Aetna and Cigna have provided tens of millions of dollars of seed money to create a

legitimate computerized fee review database. As Ingenix’s parent-company, United Health

Group’s own press release notes:

In particular, the agreement commits UnitedHealth Group to pay $50 million to fund a not-for-profit entity to develop and own a new, independent database product to replace the Prevailing Health Charges System (PHCS) and Medical Data Research (MDR) database products owned by UnitedHealth Group’s subsidiary, Ingenix, Inc. Both products are used by a number of health plans and employers as tools that help determine the amount to reimburse members who receive physician services outside their managed care networks. When the new database product is ready, Ingenix will close the PHCS and MDR database products.

The specifics of this properly constructed database will be as follows:

• United will pay $50 million to establish a new, independent database run by a qualified nonprofit organization;

• The nonprofit will own and operate the new database, and will be the sole arbiter and decision-maker with respect to all data contribution protocols and all other methodologies used in connection with the database;

• The nonprofit will develop a website where, for the first time, consumers around the country can find out in advance how much they may be reimbursed for common out-of-network medical services in their area;

• The nonprofit will make rate information from the database available to health insurers;

• The nonprofit will use the new database to conduct academic research to help improve the health care system;

• The nonprofit will be selected and announced at a future date.


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FAIR Health, Inc. has now been chosen as the “not-for-profit entity” in charge of developing the new

independent database.

6. In the automobile insurance context, companies obtain use of the flawed Ingenix

database through the use of Decision Point, which is proprietary software developed and sold by

Mitchell Medical, a division of Mitchell International, Inc. Decision Point includes fee schedule

modules that are licensed from Ingenix. In addition Decision Point contains flawed data analysis

engines (software programs) that seek to compare information from the Ingenix database with

bills submitted to Allstate for review, the product of which purports to be a recommended “usual,

reasonable, and customary charge for “like medical services” within a “comparable” geographic

area, at a “like” date of services.

7. All automobile insurance companies using Decision Point for medical

reimbursements make use of the Ingenix database, and the Decision Point analysis engines, and

all such users, including Allstate, uniformly denote “unreasonable medical expense” reductions

based on the Ingenix data with the cryptic indicator codes “41” or “X41.”

8. Allstate entered into a license agreement with Mitchell Medical, under which

Allstate is granted the right to access and use the Decision Point software and Mitchell Medical

agreed to provide continuous customer support and other services regarding the use of the

Decision Point Software for the duration of Allstate’s use.

9. Allstate’s use of the Decision Point software applying the Ingenix database is in

contravention of Allstate’s standard automobile insurance contracts, which are being marketed

and sold under either Allstate or Encompass brand names (the “Allstate Policy” and “Encompass

Policy,” respectively):


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• The Allstate Policy obligates Allstate to pay “to or on behalf of an insured person

all reasonable expense actually incurred for necessary medical treatment, medical services or medical products actually provided to the insured person”;

• Employing virtually identical language, the Encompass Policy similarly obligates

Allstate to pay “reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, . . . and funeral services”; and

• Both Allstate and Encompass Policies define “unreasonable medical expenses,” which are excluded from coverage, as “fees for medical services which are

substantially higher than the usual and customary charges for those

services.”

10. By relying on Decision Point, Allstate fails to make any determination of whether

the submitted medical expenses are unreasonable1 because Decision Point is not designed in the

first instance to determine whether a charge is “reasonable,” “unreasonable,” “substantially

higher” and/or “usual and customary,” although Allstate uses it, and Mitchell Medical sells it, for

these very purposes.2

11. Decision Point simply compares the line-item charge billed for a medical

procedure to internal fee schedules embedded within the software (the Ingenix database).

Insurers such as Allstate work with Mitchell Medical to select a particular “percentile” payment

benchmark (e.g., the “85th percentile” of the Ingenix database), and any of the charged amount

that exceeds that payment benchmark is automatically capped and excluded from coverage. The

percentile benchmark chosen by Allstate for either the Allstate Policy or Encompass Policy is not

1 The “unreasonable medical expense” determination is the last step in Allstate’s fee review process.

In other words, Allstate does not begin to engage in any such determination unless and until all other categories of Policy exclusions or limitations have been assessed and determined acceptable. As such, the case does not involve: (1) the issue of “necessity” of treatment; (2) the issue of “relatedness” of the injury to a covered occurrence; or (3) any other Policy exclusion or limitation.

2 Before Decision Point, Allstate used proprietary software developed by ADP Integrated Medical Solutions. Allstate recently settled a national class action (the “Strasen” case) that challenged the ADP database and its “unreasonable medical expense” reductions. Prior to these automated systems, Allstate’s standard practice and custom was to pay the medical provider’s charge in full, in the absence of fraud (i.e., a claim being referred to its Special Investigative Unit).


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disclosed, has no application, and does not take into account what would be a “reasonable” (or

“unreasonable”) charge for the service, as it simply performs a mechanical comparison between

numbers.

12. Despite such limitations, Allstate continue to use Decision Point and rely on the

flawed Ingenix database embedded in it to limit the amount of reimbursements to be paid on

submitted claims.

13. Through the creation and use of Decision Point, the enterprise among Allstate,

Ingenix and Mitchell Medical (“Code 41 Enterprise”) engaged in a fraudulent scheme to under-

reimburse healthcare providers (i.e., physicians, hospitals, clinics, etc.) for services rendered that

were deemed covered and necessary and resulted in millions of dollars in damages to the Class.

14. Mitchell did more than participate in its own affairs as part of this enterprise.

Mitchell provided significant ongoing support, acted as a bridge to Ingenix for “certifications” of

accuracy, and was known by Allstate to be a partner which Allstate could use as the basis to cite

as grounds for denying portions of reimbursable benefits. Indeed, Mitchell intentionally slanted

Decision Point to serve the purposes of the enterprise by actively working to ensure that the

reimbursement decisions made by Decision Point were lower than the internal price schedules

Allstate utilized as a cross-check – Mitchell knew and discussed internally the need to ensure

Decision Point reached these lower reimbursement decisions, because if Decision Point did not,

Mitchell knew and discussed the fact that Allstate would not purchase the product.

15. Mitchell’s role as a “bridge” to Ingenix was also crucially important. Ingenix did

not sell its flawed database directly to Allstate or other auto insurers. Mitchell provided a

“middleman” through which Ingenix could be be used in the auto context, and part of Mitchell’s

role was to ensure that Ingenix could “verify” pricing when a customer such as Allstate asked, as


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well as procure the services of Ingenix “experts” to testify about the purported accuracy of the

Ingenix database. Without Mitchell, Allstate would not have been able to obtain the patina of

objectivity that it was able to present to its policyholders.

16. Indeed, processing and paying medical coverage claims for reimbursement is a

vital part of Allstate’s business, and Mitchell, by selling and supporting Decision Point with the

knowledge that it would cause Allstate to make false and fraudulent reimbursement decisions,

was a director of the operations of the enterprise.

17. Mitchell willfully participated in the scheme with full knowledge that its product

was (a) fraudulent and (b) foreseeably likely to result in the use of mail or wire to defraud

Allstate policyholders. Indeed, because Mitchell knew that its product and the underlying data

were fraudulent, the regular transmission of information back and forth between Mitchell and

Allstate was itself wire and mail fraud.

18. In addition, Allstate conducted the affairs of the enterprise by using its

association-in-fact business arrangement with Mitchell to conduct Allstate’s unlawful practice of

making reimbursement decisions which both parties were aware were fraudulently depressed.

19. Accordingly, Allstate’s conduct, along with that of Mitchell Medical, constitutes

breach of contract under both the Allstate Policy and Encompass Policy, an unfair and deceptive

practice, and violations of the Racketeering Influenced and Corrupt Organizations Act (“RICO”),

18 U.S.C. §§ 1962(c) and (d).

JURISDICTION AND VENUE

20. This Court has subject matter jurisdiction of the claims asserted herein pursuant to

28 U.S.C. §§ 1331 and 1332(d)(2)(A) in that the amount in controversy exceeds the sum or value


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of $5,000,000, exclusive of interest and costs, and is a class action in which members of the

putative Class are citizens of States different from Defendant.

21. Venue is proper pursuant to 15 U.S.C. § 80b-14 and 28 U.S.C. § 1391.

Defendants regularly transact and solicit business in this District and Allstate’s principal place of

business is headquartered in this District.

CHOICE OF LAW

22. As a federal court exercising diversity jurisdiction, the Court applies the choice of

law rules of Illinois, the forum state.

23. Illinois substantive law may be constitutionally applied to the claims of Plaintiffs

and Class under the Due Process Clause, 14th Amend., § 1, and the Full Faith and Credit Clause,

art. IV., § 1, of the U.S. Constitution. Illinois has the most significant relationship to the

occurrence and to the parties, as alleged herein, thereby creating state interests that ensure that

the choice of Illinois state law is not arbitrary or unfair.

24. Allstate’s principal place of business is located in Illinois. The Allstate

representatives who contracted with Mitchell Medical for Allstate’s use of Decision Point is

based in Illinois, at Allstate headquarters.

25. In light of these facts, Illinois has a paramount interest in regulating Defendants’

conduct. Allstate’s decision to locate its headquarters and persons responsible for its dealings

with Mitchell Medical, Ingenix and the fee review process using Decision Point in Illinois, and

avail itself of Illinois courts and laws render the application of Illinois law to the claims at hand

constitutionally permissible.


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26. Illinois is the place where Plaintiffs and each Class member contracted with

Allstate because neither the Allstate nor the Encompass Policy is effective until/unless they are

countersigned by Allstate officials in Northbrook, Illinois.

27. As a result of the foregoing, Illinois is the state with the most significant

relationship to the occurrence and the parties.

PARTIES

28. Plaintiff D. M. Robinson Chiropractic, S.C. is/was at all times relevant a citizen

of Illinois and a service corporation that employs licensed medical providers. At all times

relevant, Plaintiff, as the assignee of patients covered by Allstate Policy who received medical

treatment at D. M. Robinson Chiropractic, S.C., was a covered claimant under an Allstate Policy.

29. Plaintiff Marc W. Widoff, D.C.P.C. is/was at all times relevant a citizen of

Arizona and a service corporation that employs licensed medical providers. At all times relevant,

Plaintiff, as the assignee of patients covered by Encompass Policy who received medical

treatment at Marc W. Widoff, D.C.P.C., was a covered claimant under an Encompass Policy.

30. Defendant Allstate Insurance Company (“Allstate”) is a corporation organized

under the laws of Delaware with its principal place of business located in Northbrook, Illinois.

Allstate does business in and is headquartered within this District.

31. Defendant Mitchell International, Inc. (“Mitchell Medical”) is a corporation

organized under the laws of Delaware with principal place of business in San Diego, California.

Mitchell Medical does business within this County. Through its Mitchell Medical division,

Mitchell International provides Allstate and other property and casualty insurers with automotive

medical claims processing services, including Decision Point software that automatically adjusts

Medpay claims based upon the Ingenix database information.


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SUBSTANTIVE ALLEGATIONS

A. Allstate Is Contractually Obligated To Pay All Reasonable Medical Expenses

But May Exclude “Unreasonable Medical Expenses” That Are

“Substantially Higher” Than the “Usual and Customary Charge.”

32. In the automobile insurance industry, medical payments coverage, or “Medpay,”

is a contractual form of “no fault” coverage entered into between insurers, such as Allstate, and

their insured persons, such as Plaintiffs (as assignees of the insured) and the Class – i.e., covered

claimants. Medpay coverage provides for payment of medical bills following a “covered

occurrence,” i.e., an automobile accident. The purpose of Medpay coverage is to provide a fund

for the reimbursement of medical expenses allowing the insured to obtain medical care for an

acute injury following an accident to improve recovery without concern for the source of

payment.

33. Allstate markets and sells its Medpay policies under two different brand names,

Allstate Policy and Encompass Policy. All Allstate Policies contain the following uniform

provisions:

• “Automobile Medical Payments” section provides: “Allstate will pay to or on

behalf of an insured person all reasonable medical expenses actually incurred for necessary medical treatment, medical services, or medical products actually provided to the insured person. Hospital, medical . . . expenses . . . are covered.”

• “Limits of Liability” section provides: Allstate will pay “the limits of our Personal Medical Payments” “stated on the Policy Declarations.”

• “Unreasonable or Unnecessary Medical Expenses” section provides: “If the insured person incurs medical expenses which are unreasonable or unnecessary, we may refuse to pay for those medical expenses and contest them.

Unreasonable medical expenses are fees for medical services which are

substantially higher than the usual and customary charges for those

services.”

• “Proof of Claim; Medical Reports” section provides: “as soon as possible, any person making a claim must give us written proof of claim. It must include all


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details we may need to determine the amounts payable. We may also require any person making claim to submit to examination under oath and sign the transcript.”

34. Likewise, all Encompass Policies contain the following uniform provision, which

are virtually identical to the provisions contained in the Allstate Policies:

• “Medical Expense- Motor Vehicle” “Insuring Agreement” section provides: “we will pay medical expenses incurred or medically ascertained within three years from the date of accident except as excluded by the provisions listed in the Medical Expense- Losses We Do Not Cover. Medical Expense- Motor Vehicles applies to bodily injury caused by a vehicle accident and sustained by a covered person.”

• “Limits of Liability” section provides: Encompass’ “limit of liability shown in the Coverage Summary for “Medical Expense” is our maximum limit of liability for each person injured in any on accident.”

• “Unreasonable or Unnecessary Medical Expenses” section provides: “If the covered person incurs medical expenses which are unreasonable or unnecessary, we may refuse to pay for those medical expenses and contest

them. Unreasonable medical expenses are fees for medical services

which are substantially higher than the usual and customary charges

for those services.”

• “Proof of Claim; Medical Reports” section provides that any person making a claim must give us written proof of claim. It must include all details we may need to determine the amounts payable. Encompass may also require any person making a claim to submit to examination under oath and sign the transcript.

35. Thousands of covered claimants have been injured in covered occurrences and

incurred usual, customary and reasonable expenses for necessary medical treatment from

licensed medical providers.

36. While neither the Allstate Policy nor the Encompass Policy defines “reasonable

medical expenses” (except, on information and belief, in the State of Montana), both Policies do

define “unreasonable medical expenses” as “fees for medical services substantially higher than

the usual and customary charges for those services.” Neither Policies define, however, nor does


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Allstate disclose otherwise, the meaning of the phrase “substantially higher” or “usual and

customary medical charges.”

37. These Policies also represent that Allstate assumes the burden of determining

when an expense is purportedly “unreasonable” and may “refuse” to pay such expenses and

“contest” them.

B. Allstate Wrongfully Reduces Covered Medpay Benefits By Failing to

Determine that the Reduced Amount Constitutes an “Unreasonable Medical

Expense” As Defined In The Policies.

38. Notwithstanding these express contractual terms set forth in both the Allstate and

Encompass Policies, Allstate routinely and systematically denies coverage for part of the medical

expenses submitted to it by covered claimants (i.e., Plaintiffs and Class) without first determining

that the medical expenses are “unreasonable” (i.e., that the medical expense is “substantially

higher than the usual and customary charges for those services”).

39. Allstate reduces the reimbursement amounts to be paid to covered claimants by

using Decision Point that it licenses from Mitchell Medical for fee review purposes. Allstate’s

reliance on Decision Point, however, does not – indeed, cannot – fulfill its contractual

obligations under both the Allstate and Encompass Policies because Decision Point does not, and

is not designed to, determine whether a particular medical charge is “unreasonable,” or

“substantially higher than the usual and customary charges for those services.”

40. Despite its representation in both the Allstate and Encompass Policies that, before

refusing payment, Allstate will make a determination that the medical charges incurred by its

insureds are indeed “unreasonable,” Allstate simply uses Decision Point to make this

determination based upon payment parameters selected by Allstate, the flawed Ingenix fee

schedule embedded within Decision Point, and Decision Points analysis engine. Ingenix, the


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developer of these fee schedules, explicitly disclaims any warranties behind the fee data being

used to determine reimbursement amounts and concedes that Decision Point using these fee

schedules does not make “reasonable” or “unreasonable” determinations.

41. Any submitted amount that exceeds a percentile benchmark, which is unilaterally

and secretly selected by Allstate, of the deeply flawed Ingenix database is excluded from

coverage. For instance, if the 85th percentile for a particular charge in Ingenix database is $24.00,

and the charge submitted is $25.00, Allstate pays only $24.00 and excludes $1.00 from Policy

coverage.

42. Such coverage limits and exclusions are denoted by Decision Point in a computer-

generated EOB form (titled, Explanation of Medical Bill Payment) provided to Plaintiffs and

Class with codes “41” or “X41.” The EOB then uniformly (and falsely) represents the

following:

Eligible Amount Based on 100% Coverage

X41 The amount allowed is based on provider charges within the provider’s geographic region.

43. For example, pursuant to an Allstate Policy, Plaintiff D. M. Robinson

Chiropractic, S.C. submitted a medical bill in September 2008 to Allstate which contained a line

item charge of $50.00 for CPT 98940. Allstate, using the Mitchell/Ingenix database of biased,

flawed charges, reimbursed this charge at $48.00, excluding $2.00 of the line item charge from

coverage. The reduction was denoted by code 41. Again pursuant to the same Allstate Policy,

Plaintiff D. M. Robinson Chiropractic, S.C. submitted a medical bill in January 2009 to Allstate

that contained a line item charge of $67.00 for CPT 98941. Allstate, using the Mitchell/Ingenix


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database of biased, flawed charges, reimbursed this charge at $64.00, excluding $3.00 of the line

item charge from coverage. The reduction was denoted by code X41.

44. Similarly, pursuant to an Encompass Policy, Plaintiff M. W. Widoff, D.C, P.C.

submitted a medical bill in May 2010 to Allstate that contained a line item charge for $59.00 for

CPT 98940. Allstate, using the Mitchell/Ingenix database of biased, flawed charges, reimbursed

this charge at $55.00, excluding $4.00 of the line item charge from coverage. The reduction was

denoted by code 41. In the same submitted medical bill, there were a total of two reductions

denoted by code X41 and nine reductions denoted by code 41, reducing the total covered amount

by $46.00.

45. There is no statistical definition of “reasonableness,” and no particular percentile

benchmark represents a “reasonable” expense. Likewise, there is no statistical definition of

“unreasonableness,” and no particular percentile benchmark represents an “unreasonable”

expense.3 Indeed, Decision Point itself provides an option to apply different payment percentiles

– such as the 70th, 85th or 95th percentile – which would then serve as an arbitrary, undisclosed,

and eminently modifiable, cap to the reimbursement amount on submitted claims.

46. The choice of percentile benchmark is indicative of the insurance business

climate, not the reasonableness of any medical expense. In fact, in states where it has been the

subject of litigation or state enforcement, Allstate and/or other insurers have stopped the use of

Decision Point altogether. Information regarding litigation and state enforcement are also shared

3 Likewise, there is no statistical definition of “substantially higher” or “usual and customary” and no particular percentile benchmark represents a “reasonable” charge or demonstrates that one charge is “substantially higher” than another.


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directly from other insurers via meetings at industry conferences, as well as indirectly through

Mitchell which provides fee review services to Allstate’s competitors.

47. As such, the amount excluded as a result of this fee review process, which is

based not only on the flawed Ingenix database but also on the arbitrary cap placed on the

payment amount, and the flawed analysis engine programmed into Decision Point, does not in

any way constitute unreasonable medical expense.

48. In addition to its use of the flawed Ingenix database, Decision Point is itself

irreparably flawed. Throughout the period referred to in this Complaint, Decision Point has

repeated encountered errors in its processing of Allstate medical payments claims. When

Decision Point encounters programming or data analysis errors it is designed to identify those

errors to an error log and discontinue its bill review until the error in the program code can be

identified and remedied. However, Decision Point was repeatedly experiencing error codes in

the thousands per day as a result of failures within the programming to properly identify and

analyze data. Rather than identify and correct the errors, Mitchell, with Allstate’s knowledge and

acquiescence “suppressed” the errors such that the Decision Point would continue with the bill

review irrespective of the proper functioning of its programs. Error suppression was

accomplished in a number of ways including but not limited to the substitution of arbitrary values

for values otherwise determined from the data analyzed, the inclusion and/or exclusion of data,

and other techniques that would cause the operation of Decision Point’s analysis engine to

proceed as though no error has occurred. The error suppression techniques resulted in the

production of “unreasonable medical expense” recommendation that were arbitrarily manufactured

by the suppression techniques, rather than the correct operation of Decision Point’s programs

and valid data. The manufactured “unreasonable medical expense” recommendations were not


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visible to the Decision Point users (Allstate staff level claims processing personnel) who were

unaware that the “unreasonable medical expense” recommendation displayed was arbitrarily

produced by error suppression. 43. Allstate was aware that Decision Point was encountering

numerous programming and data errors, and that Mitchell was employing error suppression

techniques to disguise output of the “unreasonable medical expense” recommendations as valid

and reliable, when both Allstate and Mitchell knew the “unreasonable medical expense”

recommendations were not the product of reliable and valid data analysis but a pretext for

arbitrary generation of low reimbursement amounts.

49. In sum, as part of its fee review, Allstate, based on an undisclosed percentile of

the flawed Ingenix database, Decision Point’s analysis engine fraught with programming and

data errors that were arbitrarily suppressed, “unreasonable medical expense” recommendations

that were known to be the product of corrupt data and programming, creates an appearance of

conducting a line-by-line audit of provider bills without:

• disclosing to its insureds or their providers that it is making “unreasonable” charge determinations based upon a predetermined percentile of the flawed Ingenix database;

• disclosing to its insureds or their providers that it is making determinations of “unreasonable” charges without conducting an inquiry into whether a medical expense meets the definition of “unreasonable” provided in either the Allstate or Encompass Policies;

• increasing reimbursement for the submitted charges below Allstate’s determined maximum reasonable reimbursement;

• individually analyzing the claim or the provider’s usual and customary charge, and/or without eliciting any reasons why any particular medical charge was incurred;

• individually analyzing whether the charge was “the usual and customary charge [of the provider or in the community];


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• considering whether the charges as a whole for the services provided were within Allstate’s determined maximum reasonable reimbursement; and

• representing that its usual, reasonable, and customary medical reimbursement determinations were unreliable and valid when they knew that they were not reliable.

50. As a result, Allstate refused payment to healthcare providers, and reduced medical

payments benefits to covered claimants, without having made a good faith, bona fide

determination of the “unreasonableness” of the charges submitted to it prior to its refusal; failed

to adopt and implement reasonable standards for the prompt investigation and settlement of

claims arising under its policies; used the Decision Point “unreasonable medical expense”

recommendation as a pretext for representing to its insureds and healthcare providers that

payment in conformity with policy requirements had been made; and used and continued to use

Decision Point as the primary determinant of medical benefits reimbursement when it knew or

should have known that Decision Point was incapable of making reimbursement determinations

in conformity with policy requirements..

C. Allstate’s Medpay Claims Reduction Scheme Has Been Undertaken In

Concert With Mitchell Medical And Ingenix.

51. As discussed above, Allstate and Mitchell, with Ingenix’ consent and assistance,

have undertaken a fraudulent fee review scheme to underpay the healthcare providers who

provided necessary medical services to those entitled to Medpay coverage under the Allstate or

Encompass Policies. At the heart of the scheme lies Mitchell Medical’s Decision Point fee

review software, which incorporates the Ingenix database. Using Decision Point, Allstate limited

the amount of Medpay reimbursements to a predetermined percentile of the flawed Ingenix

database and manufactured pretextual “unreasonable medical expense” recommendations.


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52. The fraudulent reimbursement scheme was conducted through an association-in-

fact enterprise comprised of Allstate, Mitchell Medical, and Ingenix (“Code 41 Enterprise”),

using the interface of their business units relating to MedPay reimbursement of automobile

collision injuries Mitchell Medical and Allstate, through their relevant business units,

participated in the operation and direction of the Code 41 Enterprise. Mitchell and Allstate and

Mitchell and Ingenix agreed that Allstate and/or Mitchell would commit at least two acts in

furtherance of the ends of the ongoing fraudulent reimbursement scheme -- Allstate’s generation

of positive operating cash flow by concealing that the operation of the exclusion of unreasonable

medical expenses is accomplished through the generation of sham reimbursement amounts. All

three generated revenues based upon Allstate’s obtaining money from class members by the

operation of the fraudulent scheme.

53. Allstate participated in the operation and management of the Code 41 Enterprise.

Allstate directed the Enterprise’s affairs by, inter alia:

• writing the terms of the contract set forth in both the Allstate and Encompass Policies;

• selecting the percentile at which Allstate would reimburse the Medpay policyholders and their healthcare providers for covered services;

• specifying the coverage parameters of both the Allstate and Encompass Policies;

• selecting Mitchell Medical as its database aggregator;

• deciding all appeals based on usual and customary rates; and

• participating in the suppression of programming and data errors in operation of Decision Point.

54. Mitchell Medical participated in the Code 41 Enterprise by, inter alia:


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• selling its Decision Point fee review software to Allstate pursuant to a licensing agreement;

• working with Allstate to customize Decision Point to maximize Allstate’s interests at the expense of the policyholder;

• providing regular data updates;

• licensing the Ingenix database;

• providing fee determination verifications and contracting with Ingenix to provide litigation support;

• programming Decision Point to suppress programming and data errors;

• manufacturing values for inclusion in the Decision Point analysis of reimbursement rates that it knew were not the product any actual data analysis, and were done solely to produce an “unreasonable medical expense” recommendation that was not validly determined; and

• reaching agreements or understandings with Allstate to suppress errors in the analysis conducted by Decision Point in order to allow Decision Point to generate invalid and unreliable “unreasonable medical expense” determinations to be used as a pretext for the determination reimbursement to medical providers.

55. The Code 41 Enterprise is an “enterprise” as that term has meaning under 18

U.S.C. § 1961. The Code 41 Enterprise has and continues to have an ascertainable structure and

function separate and apart from the pattern of racketeering activity in which Allstate has

engaged. Decision-making within the Code 41 Enterprise with regard to the use of data from the

Ingenix database and the suppression of data and programming errors including manufacture of

arbitrary values for inclusion in the fee review analysis, that would reduce medical payments was

consensual. Ingenix, Mitchell Medical and Allstate all consented to the use of the database, and

error suppression techniques within the confines of the Decision Point software, each profited

from its use, and each knew that the “unreasonable medical expense” recommendations produced


20

were arbitrary, unreliable and invalid, and not the produce of any acceptable data analysis

techniques.

56. The Code 41 Enterprise functions as a structured and continuous unit, and the

members of the Enterprise perform clearly defined roles consistent with this structure. For

example, Decision Point : (1) collects the data from a knowingly flawed Ingenix Database; (2)

collects data from Allstate that may or may not conform to an appropriate XML Schema; (3)

encounters numerous programming and data errors which are then suppressed with arbitrarily

manufactures values; (4) “confirms” specific reimbursement pricing upon request from Allstate;

(5) produces EOBs falsely representing that reimbursement amounts are the product of a

comparison to a reliable database of known charges for the same treatment, within a designated

geographic area during a specific period of time; and (6) provides litigation support to Allstate

when it is sued. Mitchell is not a passive seller of data or data analysis. Mitchell knows that

Decision Point’s analysis produces so many errors that its programs must be overridden with

arbitrarily selected values in order to produce a timely, albeit unreliable, “unreasonable medical

expense” recommendation. Both Allstate and Mitchell know that Decision Point cannot produce

a medical expense reimbursement recommendation that determines when a charge submitted to

is “reasonable” or “unreasonable” as defined in Allstate’s insurance policy. They also know

that the “unreasonable medical expense” recommended by Decision Point is not either a reliable

or valid tool for determining reimbursement to medical providers.

57. The members of the Code 41 Enterprise performed certain legitimate activities

that are not subject to challenge in this Complaint, including the provision of automobile

insurance and plan and claims administration services by Allstate and Mitchell Medical, which

was done for many claims lawfully and without resort to unlawful practices. Ingenix also legally


21

administers and sells a number of other products which are legitimate and not related to the

claims described in this Complaint. However, the activities delineated in this Complaint were

performed by the Code 41 Enterprise and are subject to challenge. Specifically, the activities

challenged herein made use of the Code 41 Enterprise’s structure to carry out the fraudulent and

unlawful activities including intentional under-reimbursement of Medpay covered medical

charges, and pretextual use of the medical expense analyzing program Decision Point when they

knew it did not produce reliable and valid “unreasonable medical expense” determinations.

58. The Code 41 Enterprise was at all relevant times a continuing unit involving

Allstate, Mitchell Medical and Ingenix functioning with a common purpose of reducing the price

paid for medical reimbursements, and increasing the profits of the Code 41 Enterprise

participants. The Code 41 Enterprise was used to create a mechanism or vehicle by which

Allstate could reduce payments to Plaintiffs and Class through the use of flawed, skewed and

invalid data that could not be challenged effectively. In particular, as described herein, the Code

41 Enterprise was used to create and administer what appeared to be an appropriate and

unassailable database which reported actual charge data; the Ingenix database was designed to

appear valid as a basis for the usual, customary and reasonable rates when, in fact, it is and was

invalid.

59. Mitchell Medical sold its services to Allstate as a cost-containment device, and it

gave Allstate the ability to appear to generate legitimate medical reimbursements and to control

or manage the actions of the Enterprise in accomplishing its purpose. The Decision Point

software sold by Mitchell Medical “follows your custom business rules.” Mitchell Medical

promises that “Decision Point is built from the customer up – development doesn’t begin until

our clients have placed their stamp of approval on the feature/functionality design.” Allstate thus


22

manages how Mitchell Medical designs and implements the service that provides the mechanism

for the scheme to defraud Allstate covered claimants, and Mitchell deliberately allows, with

Allstate’s knowledge and consent, DecisionPoint to generate reimbursement numbrs that bear no

relationship to reasonable and customary or unreasonable medical expense as defined under

Allstate’s or Encompass’ policies. Mitchell Medical licenses the Ingenix database and

incorporates it into Decision Point, and Allstate manages how the Ingenix database will be

applied to the Medpay claims of Allstate covered claimants.

60. Through their roles in the Code 41 Enterprise, Mitchell Medical benefited directly

by enhancing its ability to earn licensing fees from the sale and support of Decision Point while

Allstate benefitted by reducing the amount of money it paid on Medpay claims. The more

successful Allstate was in saving money, the more money Mitchell Medical earned.

61. Mitchell exercised direction and control of the enterprise in numerous ways and

was no “mere vendor” of Allstate.

• Mitchell exercised direction and control by manipulating the Analysis Engine of

Decision Point to ensure that it would spit out lower reimbursement amounts

because Mitchell knew and discussed within Mitchell and with Allstate the fact

that Allstate cross checked Decision Point results with Allstate generated internal

data. Allstate always used whichever result was lower. Allstate communicated to

Mitchell and Mitchell understood that if Decision Point was not coming out lower

than Allstate’s internal data, Allstate would cease purchasing Decision Point, and

Mitchell actively worked to ensure that this did not happen.

• Mitchell exercised direction and control by acting as an interface with Ingenix

itself, obtaining price verifications when required and making Ingeix


23

“experts”available to Allstate ot testify if neededto try to justify Ingenix’s frankly

unjustifiable data and methodology.

• Mitchell also exercised direction and control through its knowledge of how

Allstate was using Decision Point and its knowledge of the fact that Decision

Point and the underlying Ingenix data were flawed. By selling decision Point to

Allstate, Mitchell knew that Allstate would make reimbursement decisions based

on Decision Point and that those decisions would be fraudulent and would be

transmitted by the hundreds of thousands through use if wire and mail in violation

of federal wire and mail fraud statutes. Mitchell’s knowledge of Allstate’s use

and Mitchell’s sale of the product despite its knowledge of Allstate’s use

constitutes direction and control.

62. As alleged herein, although Ingenix issues a specific disclaimer to users of

Ingenix about the accuracy of its data, the Enterprise makes use of the Ingenix data in total

disregard of the disclaimer. The members of the Enterprise know that each is making use of the

Ingenix data in violation of the disclaimer, yet they continue to do so in pursuit of the interests of

the Enterprise.

63. At all relevant times, the Code 41 Enterprise was engaged in, and its activities

affected, interstate commerce within the meaning of RICO, 18 U.S.C. §1962(c).

64. Throughout the class period, Allstate, Mitchell Medical and Ingenix remained

members of the Code 41 Enterprise undertaking countless and nearly constant acts of mail and

wire fraud for their common purpose of reducing the price paid for medical services.

65. During the class period, Allstate participated in the conduct of the Code 41

Enterprise in order to shift the costs of medical treatment to its policyholders and therefore to


24

Plaintiffs and the Class, to reduce payments and to create an appearance of legitimacy for its

benefit reductions. Using U.S. mail and interstate wire facilities, Allstate provided false and

misleading information to the Plaintiffs and the Class to convert those withheld funds for the

Code 41 Enterprise’s own direct and indirect financial gain.

66. The Code 41 Enterprise benefited from the pattern of racketeering activity through

the reduction of usual, customary and reasonable rate costs by Allstate. Such benefits would not

have been obtained absent entry into the Code 41 Enterprise and were, in addition to the conduct

of Allstate alleged above, the shared goal of the Enterprise for which its members functioned as a

continuous unit.

67. If Allstate had not participated in the conduct of the Code 41 Enterprise through

its decision making regarding the database and through the decision to use the Ingenix database,

it would not have been able to obtain the benefits it did from the Enterprise. Mitchell Medical

benefited from the money paid to it by Allstate, and both of them benefited from the faulty

database provided by Mitchell Medical in order to reduce medical reimbursements. Allstate

could not have saved the millions of dollars it did if it had not used the Ingenix database and the

corrupted Decision Point analysis engine for making the usual, customary and reasonable rate

determinations even though it knew that they were flawed and invalid. By using Decision Point,

and the Ingenix database for making the usual, customary and reasonable rate determinations,

misrepresenting them, through use of the U.S. mail and interstate wire facilities, as providing a

valid and unassailable basis for such decisions, and deterring its policyholders from challenging

or otherwise raising questions over how it set the usual, customary and reasonable rates, Allstate

was able to benefit substantially from its role in assisting the control and direction of the

Enterprise, along with Mitchell Medical. Thus, members of the Enterprise benefitted from the


25

pattern of racketeering activity at the expense of the Plaintiffs and Class. Absent participation in

the Enterprise, the members of the Enterprise would not have so benefitted.

68. Allstate and Mitchell, acting through their officers, agents, employees and

affiliates, committed numerous predicate acts of “racketeering activity,” as defined in 18 U.S.C.

§1961(5), and continues to commit such predicate acts, in furtherance of its underpayment

scheme for medical services, including (a) mail fraud, in violation of 18 U.S.C. §1341, and (b)

wire fraud, in violation of 18 U.S.C. §1343. Each use of the mail or wire in furtherance of the

fraudulent scheme described above is a predicate act of mail and wire fraud. Such predicate acts

include the following:

• mailing, causing to be mailed and/or knowingly agreeing to the mailing of various materials and information including, but not limited to, materially false or misleading information regarding the use of Ingenix, Decision Point or fictitious reimbursement methods to insureds, plan sponsors, or others; materially false or misleading data for use in the Ingenix database, materially false and misleading usual, customary and reasonable rate determinations, EOBs and remittance advices for the purpose of saving money at the expense of the Plaintiffs and the Class, with each such mailing constituting a separate and distinct violation of 18 U.S.C. §1341;

• transmitting, causing to be transmitted and/or knowingly agreeing to the transmittal of various materials and information including, but not limited to, materially false usual, customary and reasonable rate determinations and related explanation of such determinations, materially false or misleading information regarding Ingenix or usual, customary and reasonable rate reimbursement methods to plan sponsors, by means of telephone, facsimile and the Internet, in interstate commerce, for the purpose of effectuating the above-described false payment schemes, and each such transmission constituting a separate and distinct violation of 18 U.S.C. §1343; and

• regular and repeated communications between Allstate and Mitchell Medical, by means of telephone, facsimile, the Internet and mail, regarding the implementation, use and/or maintenance of the Decision Point software, and other similar assistance provided by Mitchell Medical, each such communication constituting a separate and distinct violation of 18 U.S.C. §1343 and/or §1341.


26

69. Through their wrongful conduct as alleged herein, Allstate, in violation of 18

U.S.C. §1962(c), conducted and participated in the conduct of each of the Code 41 Enterprise’s

affairs, directly and indirectly, through a “pattern of racketeering activity,” as defined in 18

U.S.C. §1961(5). These acts of racketeering activity have continued throughout the class period

to the present.

70. Allstate issued false and misleading letters to Plaintiffs and the Class regarding

benefits, as well as false and misleading EOBs and Explanations of Payment. Allstate knew that

the Ingenix database and Decision Point charge analysis was inadequate, and was not intended to

be used, or could not be reliably used to determine usual, customary and reasonable rate, but

continued to use it to make usual, customary and reasonable rate determinations anyway.

71. Allstate and Mitchell knew that the Ingenix databases and the Decision Point

analysis engine were being used without Plaintiffs and Class ever being informed that they were

unsuitable for determining usual, customary and reasonable rates and other inherent flaws.. For

example, Allstate falsely reported to Plaintiffs and Class members, via U.S. mail and interstate

wire communications, that its reductions in amounts paid for medical services were based on

usual, customary and reasonable rates when, in fact, Allstate knew that its reductions were based

on flawed and invalid numbers obtained from the Ingenix database and the Decision Point

analysis engine that substantially underreported usual, customary and reasonable rates.

72. The foregoing communications, sent via U.S. mail and interstate wire facilities,

contained false and fraudulent misrepresentations and/or omissions of material facts, had the

design and effect of preventing a meaningful evaluation and review of the Enterprise’s usual,

customary and reasonable rate determinations, and/or otherwise were incident to an essential part

of Allstate’s scheme to defraud Plaintiffs and the Class. Further, such written communications


27

were used by Allstate to provide the underpayment scheme with an appearance of legitimacy and

regularity, to conceal the scheme and/or postpone ultimate discovery and complaint of the

underpayment scheme, thereby making their discovery less likely than if no such mailings or wire

transmissions had taken place. Mitchell and Ingenix knew that Allstate’s unreasonable medical

expense exclusions and reductions of Medpay reimbursements were or would be the end results

of the fraudulent reimbursement scheme.

73. The above-described pattern of racketeering activity is related because it involves

the same fraudulent scheme, enterprise, common persons, common claim practices, common

results impacting upon common victims, and is continuous because it occurred over several

years, and constitutes the usual practice of Allstate and the Enterprise, such that it amounts to and

poses a threat of continued racketeering activity. Allstate’s scheme to defraud Plaintiffs and

Class is open-ended and on-going.

74. The direct and intended victims of the pattern of racketeering activity described

previously herein harmed Allstate policyholders and their health care providers, whom Allstate

has underpaid for medical services.

75. As a result of Allstate’s fraudulent scheme, Plaintiffs and Class were injured in

their business or property by reason of Allstate’s RICO violations because their reimbursements

rates were not the product of a valid and reliable determination of policy benefits, resulting in the

denial of benefits for which the insured’s paid, were forced to exhaust significant time and

resources addressing Allstate’s wrongful practices.

76. Plaintiffs and the Class reasonably relied on the fraudulent scheme by providing

medical care to Allstate policyholders.


28

77. Allstate further deprived Plaintiffs and the Class of the knowledge necessary to

discover or challenge the underpayments.

78. Plaintiffs’ injuries were proximately caused by Allstate’s violations of 18 U.S.C.

§1962(c) because these injuries were the foreseeable, direct, intended and natural consequence of

Allstate’s RICO violations (and commission of underlying predicate acts) and, but for Allstate’s

RICO violations (and commission of underlying predicate acts), they would not have suffered

these injuries.

79. Plaintiffs’ and the Class have standing to pursue these claims as assignees of their

patients’ benefits and/or as third party beneficiaries of their patients’ benefits.

E. Allstate’s Improper Partial Exclusions Damaged Plaintiffs and the Class.

80. Plaintiffs and the Class are covered claimants under the Allstate or Encompass

Policies.

81. Allstate saved untold amount of dollars by failing to fulfill its contractual duty to

process their Medpay claims fairly and in good faith in accordance with both the Allstate and

Encompass Policies. Notwithstanding its contractual obligation to make objectively reasonable

determinations of medical payments benefits (i.e., only unreasonable medical expenses would be

refused), Allstate – per code 41/X41 – excluded part of the amount paid to Plaintiffs and the

Class without so much as an attempt to make a determination that a charge is “substantially

higher than the usual and customary charge”, thereby leaving Plaintiffs and Class without the full

Medpay benefits for which they paid a premium, while improperly lowering Allstate claims

expense.

82. Allstate partially excluded from coverage Plaintiffs’ and Class members’ medical

expenses, even though: (a) the submitted charges were for a covered occurrence; (b) Allstate’s


29

“fee review” does not determine whether a charge is “unreasonable,” or “substantially higher

than the usual and customary charge,” but simply determines whether the charge exceeds a pre-

selected payment benchmark applied to biased data by an error ridden analysis program; (c) the

Allstate and Encompass Policies set forth several exclusions, none of which apply to Plaintiffs’

or any Class member’s claim; (d) the Allstate and Encompass Policies did not require that

Plaintiffs (or any Class member) obtain pre-authorization for medical expenses in order to

qualify for reimbursements; (e) the Allstate and Encompass Policies did not contain a per-CPT

code payment cap, but only a per-accident/occurrence limit; (f) the disputed medical treatment

was dictated and called for in good faith by treating medical providers, all of whom were duly

licensed medical professionals; (g) Allstate did not conduct a personal or physical examination of

the insured person; (h) the disputed medical treatment and expense had already been actually

incurred and was within the policy limits; (i) there was full compliance with all proof of claim

requirements by policy holders; (j) the Allstate and Encompass Policies contained a definition of

“unreasonable” expense, and Allstate failed to apply that definition when applying code 41/X41

reductions; (k) Allstate failed to meet its burden of establishing that the disputed medical charge

was properly subject to a Policy Exclusion, and/or was an “unreasonable” medical expense

before refusing to pay it; (l) Allstate did not determine that the part of Plaintiffs’ medical charge

excluded from coverage was properly subject to exclusion, unreasonable, substantially higher

than usual and customary charges, and/or contrary to prevailing billing practices; and (m) there is

no allegation by Allstate of fraud, bad faith or mistake on the part of Plaintiffs or the Class.


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CLASS ACTION ALLEGATIONS

83. This action is brought pursuant to Fed. R. Civ. P. 23. The requirements of Fed. R.

Civ. P. 23(a), (b)(2) and (b)(3) are met with respect to the class defined below.

A. Class Definition

84. Plaintiffs bring this action individually and on behalf of the following classes (the

“Class”):

Consumer Fraud Class: All persons and entities that Allstate deemed covered claimants under an Allstate or Encompass Policy, and who: (a) submitted first-party medical claims to Allstate; (b) had their claim submitted to Mitchell/Ingenix fee review; and (c) received an amount less than the submitted line-item medical expense pursuant to a code

“41/X41” reduction, during the relevant period of January 2007 through the present.

Breach of Contract Class: All persons and entities that Allstate deemed covered claimants under an Allstate or Encompass Policy, and who: (a) submitted first-party medical claims to Allstate; (b) had their claim submitted to Mitchell/Ingenix fee review; and (c) received an amount less than the submitted line-item medical expense pursuant to a code


RICO Class: All persons and entities that Allstate deemed covered claimants under an Allstate or Encompass Policy, and who: (a) submitted first-party medical claims to Allstate; (b) had their claim submitted to Mitchell/Ingenix fee review; and (c) received an amount less than the submitted line-item medical expense pursuant to a code


Excluded from the Class are persons and entities whose claims were referred to Allstate’s Special

Investigative Unit and found fraudulent. Also excluded from the Class are: (1) class members


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who released their claims against Allstate as part of the settlement in Coffell et al. v. Allstate Ins.

Co., No. 05-2-33183-6SEA, Superior Court, King County, Washington (Nov. 19, 2007, Final

Judgment and Order Approving Settlement and Dismissing Claims of Class Members with

Prejudice); and (2) claims for amounts that were denied because the submitted bills were

duplicate bills, were not related to a covered occurrence, treatment took place prior to the date of

occurrence, or was flagged for coding errors. Further excluded are members of the judiciary, and

Defendant and any entity in which it has a controlling interest, including officers and directors

and the members of their immediate families.

B. Numerosity

85. The members of the Class, being geographically dispersed and believed to number

in the thousands, are so numerous that joinder of them in a single action is impracticable.

C. Common Questions of Law and Fact

86. There are questions of law and fact that are common to all Class members,

including, inter alia:

(a) Whether Allstate’s use of Decision Point/Ingenix software to audit claims conduct constitutes statutory fraud;

(b) Whether Allstate’s use of Decision Point/Ingenix software to audit claims constitutes breach of contract;

(c) Whether Allstate may reduce medical payment benefits

based upon a pre-selected percentile of charge data;

(d) Whether code 41/X41 reductions identify “fees for medical services which are substantially higher than the usual and customary charge for those services”;

(e) Whether basing the Policy’s covered amount on “provider

charges within the provider’s geographic region” comports with the Allstate and Encompass Policies’ obligation to pay reasonable charges except those which are “substantially


32

higher than the usual and customary charge for those services”;

(f) Whether Allstate unilaterally re-priced, or re-valued,

medical expense claims to a set percentile without disclosing this practice in its insurance policies;

(g) Whether the Allstate and Encompass Policies impose an

obligation in the absence of fraud to pay medical charges submitted by a licensed medical provider, other than those which are determined to be “substantially higher that the usual and customary charge for those services”;

(h) Whether the phrase “substantially higher than the usual and

customary charge for those services” is ambiguous, and should be interpreted in favor of coverage;

(i) Whether Allstate’s use of Mitchell’s Decision Point,in its

actual operation constitutes a secret or de facto exclusion or limitation of coverage;

(j) Whether Allstate’s use of Mitchell’s Decision Point fee

review constitutes consumer fraud;

(k) Whether Allstate limits payment of medical benefits under the provisions of its Medpay policies based upon a determination of “unreasonable” medical bills as defined in the Allstate or Encompass Policies;

(l) Whether Allstate fails to disclose coverage limitations and

exclusions for policy benefits in its Medpay policies;

(m) Whether Allstate limited medical payments for medical expenses by application of the analysis engine within Decision Point was authorized by the Allstate or Encompass Policies;

(n) Whether Allstate had a business practice to reduce medical

payments for medical expenses based upon using “unreasonable medical expense” recommendations produced by Decision Point that was in conformity with Allstate or Encompass Policies;


33

(o) If Allstate limited medical payments for medical expenses by application of a percentile of charge data whether the selection conforms to policy requirements;

(p) Whether all expenses excluded by Allstate from a medical

provider based upon a fee recommendation of Decision Point is a a breach of contract;

(q) Whether Allstate’s decision to reduce medical payments for

medical expenses may be based on a selected (and undisclosed) percentile limitation in charge data;

(r) Whether Allstate’s reduction of medical payments for

medical expenses, if done on a selected percentile of charge data is a reliable and accurate basis for rejecting payment upon grounds of unreasonableness in the absence of an opinion of unreasonableness by a qualified medical provider with knowledge of usual and customary charges in the community, or any other evidence;

(s) Whether the charged amount on a formal bill issued by a

licensed medical provider to a patient, on which Allstate made payment in part, is reasonable unless and until Allstate establishes it is unreasonable;

(t) Whether Allstate has reasons specific to each claimant why

a particular medical provider charge is “unreasonable”; (u) Whether the method by which Allstate limited payment of

medical bills by code “41/X41” was authorized by the contract of insurance;

(v) Whether the method by which Allstate limited payment of

medical bills by code “41/X41” was an unfair or deceptive practice; and

(w) Whether Plaintiffs and the Class have been damaged, and if

so, in what amount.

87. These questions of law or fact common to the Class overwhelmingly predominate

over any individual issues, such that by prevailing on its own claims, Plaintiffs will necessarily

establish Defendant’s contract liability as to all Class members.


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D. Adequacy of Representation

88. Plaintiffs can and will fairly and adequately represent and protect the interests of

the Class.

89. The claims of Plaintiffs are substantially similar, if not identical, to those of

absent Class members. Without the Class representation provided by Plaintiffs, no Class

members will receive legal representation or redress for their injuries.

90. Plaintiffs and counsel have the necessary financial resources to adequately and

vigorously litigate this class action. Plaintiffs and Class counsel are aware of their fiduciary

responsibilities to Class members and are determined diligently to discharge those duties by

vigorously seeking the maximum possible recovery for the Class.

E. Superiority

91. A class action is superior to any other available method for the fair and efficient

adjudication of this controversy, given that:

(a) Common questions of law and fact overwhelmingly predominate over any individual questions that may arise, such that there would be enormous economies to the Court and the parties in litigating the common issues on a class-wide instead of a repetitive individual basis;

(b) The size of each Class member’s relatively small claim is

too insignificant to make individual litigation an economically viable alternative, such that as a practical matter there is no "alternative" means of adjudication to a class action;

(c) Few Class members have any interest in individually

controlling the prosecution of separate actions (any that do may opt out);

(d) Class treatment is required for optimal deterrence and

compensation and for limiting the court-awarded reasonable legal expenses incurred by Class members;


35

(e) Despite the relatively small size of individual Class

members’ claims, their aggregate volume, coupled with the economies of scale inherent in litigating similar claims on a common basis, will enable this class action to be litigated on a cost-effective basis, especially when compared with repetitive individual litigations; and,

(f) No unusual difficulties are likely to be encountered in the

management of this class action insofar as Defendant’s liability turns on substantial questions of law or fact that are common to the Class and that predominate over any individual questions.

CAUSES OF ACTION

COUNT I

(Allstate)

(VIOLATION OF ILLINOIS CONSUMER FRAUD ACT; ALTERNATIVELY, VIOLATION OF

SUBSTANTIALLY SIMILAR CONSUMER FRAUD ACTS)

92. Plaintiffs repeat and re-allege the allegations of the preceding paragraphs as if

fully set forth herein.

93. At all times relevant hereto, there was in full force and effect the Illinois

Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, et seq. (the “Consumer

Fraud Act”), which prohibits any concealment, suppression or omission of any material fact, with

the intent that others rely thereupon, in the conduct of any trade or commerce.4

94. At all times relevant hereto, Plaintiffs and Class, Allstate, and Mitchell Medical

were “persons” within the meaning of 815 ILCS 505/1(c).

4 The consumer fraud claims of Plaintiffs and resident absent class members is brought under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. If the Court finds that Illinois law may not be applied to the Class, then the consumer fraud claims of nonresident class members will be brought under the consumer protection statute(s) of their respective state of residence, each of which requires objective proof and analysis to demonstrate a violation of the act.


36

95. At all times relevant hereto, Allstate and Mitchell Medical conducted “trade” and

“commerce” within the meaning of 815 ILCS 505/1(f).

96. Plaintiffs and Class are “consumers” within the meaning of 815 ILCS 505/1(e).

97. Under the Consumer Fraud Act, the use or employment of any practice described

in Section 2 of the Uniform Deceptive Trade Practices Act (815 ILCS 510/2) in the conduct of

any trade or commerce is unlawful whether any person has in fact been misled, deceived or

damaged thereby.

98. Under Section 2 of the Uniform Deceptive Trade Practices Act (815 ILCS 510/2),

a person engages in a deceptive trade practice when, in the course of his or her business,

vocation, or occupation, the person represents that goods or services have sponsorship, approval,

characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has

a sponsorship, approval, status, affiliation, or connection that he or she does not have. 815 ILCS

510/2(a)(5).

99. Allstate’s determination of “unreasonable” medical expenses, through the use of

Decision Point software marketed and sold by Mitchell Medical, excusing payment under the

Medical Payments provisions contained in its Allstate and Encompass Policies is a deceptive

trade practice, and unfair, in violation of Section 2 of the Uniform Deceptive Trade Practices Act

(815 ILCS 510/2(2)), including:

• Allstate systematically limits Medical Payment benefits through implementation of an automated fee review scheme (“Decision Point”) created by Mitchell Medical that identifies a portion of medical bills submitted to it as “unreasonable” medical expenses when they exceed a pre-set cap without determining whether those expenses are substantially higher than the usual and customary charge for those services;

• Allstate requires submission of proof of loss which it claims provides all the details Allstate needs to determine amount payable and then makes determinations


37

of the amount payable by criteria and on information not contained in the proof of loss;

• Allstate falsely represents to its insureds and their healthcare providers that the portion of the submitted medical charge for which payment was refused “based upon provider charges within the provider’s geographic region” when Allstate knows that the 41/X41 refusal is actually based upon a percentile of charges applied to a selected database which Allstate chooses and which does not represent either the providers usual and customary nor the usual and customary charge within the providers medical community;

• Allstate systematically employs automated fee review – Decision Point - in which the output of “acceptable charges” is determined unilaterally by Allstate, and not the market for medical charges;

• Allstate conducts a line-by-line fee review with criteria secretly selected by Allstate, where line item charges above the selected benchmark are reduced to the benchmark but line items below the selected benchmark are not raised but paid at the amount charged so as to always pay less than what Allstate itself has determine to be “reasonable” medical expense in the aggregate;

• Allstate systematically employs the use of Decision Point to make determinations of whether a medical benefits claim submitted to it for payment under the Medical Payments benefits of its insurance policies is within policy coverage when it knows that Decision Point cannot produce a reliable or valid determination of usual and customary medical charges;

• Allstate systematically employs Decision Point to recommend claims decisions when it knows that Decision Point does not conduct reasonable investigation of usual and customary medical charges; and

• Allstate knowingly misrepresents to medical providers and its policy holders that it has refused a portion claim submitted for payment under the medical payments provisions based upon a valid and reliable determination of the usual and customary charges for medical services.

100. As a direct and proximate result of the foregoing acts and/or omissions of Allstate

and Mitchell Medical, Plaintiffs and Class were damaged in an amount to be determined at trial.

WHEREFORE, Plaintiffs, individually and on behalf of the Class of persons described

herein, pray for an Order as follows:


38

A. Finding that this action satisfies the prerequisites for maintenance as a class action and certifying the Class defined herein;

B. Designating Plaintiffs as representative of the Class and counsel as Class

counsel; C. Awarding damages against Defendant in favor of Plaintiffs and Class in an

amount to be determined at trial; D. Awarding Plaintiffs and Class prejudgment interest on any damages

awarded by the Court; E. Awarding Plaintiffs and Class reasonable attorneys’ fees and costs of this

lawsuit; and F. Awarding Plaintiffs and the Class such further relief as the Court deems

just and appropriate.

COUNT II

(Allstate)

(BREACH OF CONTRACT)

101. Plaintiffs repeat and re-allege the preceding allegations set forth in the prior

paragraphs as if fully stated herein.

102. The insurance policies under which Plaintiffs and Class seek benefits are valid

and enforceable contracts. Plaintiffs do not currently have a copy of the insurance policy Allstate

has represented as the policy covering Plaintiffs’ patients but once obtained in discovery it will

be attached hereto.

103. The conduct alleged herein constitutes breach of contract under law. The Allstate

and Encompass Policies issued by Allstate imposed upon Allstate the obligations make a good

faith determination of the extent of medical benefits to be provided under the medical payments

provision of its policies and to pay all medical expenses submitted to it other than those it


39

determined in good faith to be substantially higher that the usual and customary charge for those

services.

104. Allstate breached the express terms of both the Allstate and Encompass Policies

by systematically failing to make a good faith determination of the extent of medical benefits

through the use of biased, skewed data, unreliable and faulty analysis algorithms and processes

that, as a matter of course, refused a portion of the payment designated as a code 41/X41 which

did not make a good faith determination that the amount refused was in fact substantially higher

than the usual and customary charges for those services.

105. Plaintiffs and Class fulfilled their obligations under the above-described auto

insurance policies, including, inter alia, paying any premiums due and submitting all proofs of

loss in the form of medical bills on standard coding forms (e.g., HCFA 1500 forms) and any

other information required of them in a manner acceptable to Allstate and according to Allstate’s

practice for the submission of medical claims to it.

106. Plaintiffs and Class incurred covered medical expenses by obtaining necessary

medical treatment for acute injury sustained in a covered occurrence from licensed medical

providers, and properly submitting to Allstate all proofs of claim required under the terms of the

Allstate and Encompass policies from licensed medical providers that were maintained and kept

in the ordinary course of their medical practices.

107. Under the above-described auto insurance policies, Allstate was obligated to pay

all medical expenses incurred for necessary medical treatment as a result of bodily injury caused

by a covered accident, within policy limits and subject to express policy exclusions and limits.

108. Notwithstanding the foregoing contractual duties, Allstate failed to implement a

claims process that made a good faith determination of “unreasonable” medical expenses before


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refusing payment thereby systematically reducing and excluding from coverage parts of

otherwise covered medical charges solely because they exceeded pretextually established

“unreasonable medical expense” recommendations dictated by corrupted bill review software and

selected by Allstate.

109. Notwithstanding the foregoing contractual duties, Allstate conducted a computer

fee review of each Class members’ claim and “re-priced” and capped the class’s Medpay charges

to an undisclosed, pre-determined percentile benchmark applied to an arbitrarily selected data

base that acted to exclude part of an otherwise covered charge.

110. Moreover, for each Plaintiff and class member, Allstate conducted a fee review

and excluded part of an otherwise covered charge as “unreasonable” based upon the attribution of

a code 41 or X41, even though it did not determine whether any submitted charge was

unreasonable and/or that the charge was not “substantially higher” than the “usual and customary

charge” in breach of contract.

111. For each class member, when excluding part of an otherwise covered claim based

on a fee review reduction (code 41/X41), the EOBs uniformly state that “amount allowed is

based on provider charges within the provider’s geographic region.” This is a standard which has

no basis in the contract and is of an indeterminable origin.

112. Allstate breached the contract by engaging in the aforementioned conduct.

113. The Medpay policy language in both the Allstate and Encompass Policies should

be construed in favor of coverage because it is ambiguous or silent with respect to the following:

(a) The meaning of “unreasonable” medical expense;

(b) The meaning of “substantially higher” medical charges; (c) The meaning of “usual and customary charges for those services”;


41

(d) Whether a percentile of a selected database of charges establishes whether a charge is “unreasonable” under the insuring policies; (e) Whether the determination of “unreasonable” charges is limited to the

information requested by Allstate and encompass in the Proof of Loss provisions of the policies;

(f) Whether “unreasonable expenses” excused from payment under Allstate’s

and Encompass’ policies can be established by comparison to a defined database of charges at a selected percentile limitation without disclosing that method to the insured;

(g) Whether Allstate uses the “reasonable expenses” coverage grant not as a

description of Policy benefits, but as a secret Policy exclusion, limitation of coverage and/or payment cap;

114. As a direct and proximate result of the foregoing acts and/or omissions of Allstate,

Plaintiffs and Class were damaged in an amount to be determined at trial.

WHEREFORE, Plaintiffs, individually and on behalf on the Class of persons described










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COUNT III (Allstate and Mitchell Medical)

(Violations of RICO, 18 U.S.C. §1962(c)) 115. Plaintiffs repeat and re-allege the preceding allegations set forth in the prior


116. At all relevant times, Allstate and Mitchell Medical were “persons” within the

meaning of RICO, 18 U.S.C. §§ 1961(3) and 1964(c).

117. At all relevant times, and as described in this Complaint, Allstate and Mitchell

Medical carried out its Medpay claims reduction scheme to defraud Plaintiffs and the Class in

connection with the conduct of an association-in-fact “enterprise,” within the meaning of 18

U.S.C. §1961(4), comprised of Allstate, Mitchell Medical, and Ingenix (the “Enterprise”).

118. At all relevant times, the Enterprise was engaged in, and its activities affected,

interstate commerce within the meaning of RICO, 18 U.S.C. § 1962(c).

119. As described herein, the Enterprise has and continues to have an ascertainable

structure and function separate and apart from the pattern of racketeering activity in which

Allstate has engaged. In addition, the members of the Enterprise function as a structured and

continuous unit, and performed roles consistent with this structure.

120. Allstate and Mitchell Medical, acting through their officers, agents, employees

and affiliates, have committed numerous predicate acts of “racketeering activity,” as defined in

18 U.S.C. §1961(5), prior to and during the class period, and continue to commit such predicate

acts, in furtherance of their Medpay claims reduction scheme, including (a) mail fraud, in

violation of 18 U.S.C. § 1341, and (b) wire fraud, in violation of 18 U.S.C. § 1343. Such

predicate acts include the following:

• repeatedly mailing, causing to be mailed and/or knowingly agreeing to the mailing of uniform insurance policies issued by Allstate (e.g., Allstate Policy and


43

Encompass Policy), falsely promising that Allstate will determine whether any submitted medical payments claim is “substantially higher than the usual and customary charges for those services”;

• repeatedly mailing, causing to be mailed and/or knowingly agreeing to the mailing of letters regarding preauthorization approval(s) and/or appeals;

• repeatedly mailing, causing to be mailed and/or knowingly agreeing to the mailing of materially false and misleading “reasonable” amount determinations, EOBs and remittance advices for the purpose of saving Allstate money at the expense of Plaintiffs and the Class, with each such mailing constituting a separate and distinct violation of 18 U.S.C. §1341;

• On or about September 4, 2008, Allstate mailed an EOB form to Plaintiff D. M. Robinson Chiropractic, S.C. for services provided on July 3, July 7, and August 5, 2008, which denotes a reduction in reimbursement amount with code 41 and falsely states that “[t]he amount allowed is based on provider charges within the provider’s geographic region”;

• On or about October 16, 2008, Allstate mailed an EOB form to Plaintiff D. M. Robinson Chiropractic, S.C. for services provided on September 9 and September 25, 2008, which denotes a reduction in reimbursement amount with code 41 and falsely states that “[t]he amount allowed is based on provider charges within the provider’s geographic region”; and

• On or about July 23, 2008, Allstate mailed an EOB form to Plaintiff D. M. Robinson Chiropractic, S.C. for services provided on April 23, April 28, May 8, May 29, June 5, June 17, June 18, 2008, which denotes a reduction in reimbursement amount with code 41 and falsely states that “[t]he amount allowed is based on provider charges within the provider’s geographic region”;

• On or about May 25, 2010, Allstate mailed an EOB form to Plaintiff Marc W. Widoff, D.C., P.C. for services provided on February 3, February 5, February 8, February 10, February 11, February 12, February 13, and February 15, which denotes a reduction in reimbursement amount with

codes 41 and X41 and falsely states that “[t]he amount allowed is based on provider charges within the provider’s geographic region”;

• On or about May 25, 2010, Allstate mailed an EOB form to Plaintiff Marc W. Widoff, D.C., P.C. for services provided on February 16, February 17, February 18, February 19, February 22, February 24, February 26, March 1, and March 3, 2010, which denotes a reduction in reimbursement

amount with codes 41 and X41 and falsely states that “[t]he amount


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allowed is based on provider charges within the provider’s geographic region”; and

• On or about May 25, 2010, Allstate mailed an EOB form to Plaintiff Marc W. Widoff, D.C., P.C. for services provided on March 3, March 5, March 8, March 10, March 15, March 18, March 22, and March 25, 2010, which denotes a reduction in reimbursement amount with code 41 and falsely states that “[t]he amount allowed is based on provider charges within the provider’s geographic region.”

• repeatedly mailing, causing to be mailed and/or knowingly agreeing to the mailing of intentionally incomplete and misleading correspondence reducing Plaintiffs and Class memebers’ claims and appeals, which failed to identify the Mitchell Medical/Ingenix fee schedules and arbitrary percentile cut-offs as the basis for those denials;

• repeated electronic, mail and/or telephone communications between Allstate and Mitchell Medical regarding regular updates on the Decision Point software with information known to be inaccurate and fraudulent;

• repeated electronic, mail and/or telephone communications between Allstate and Mitchell Medical regarding regular updates on the Ingenix data module, up to several times a year;

• transmitting, causing to be transmitted and/or knowingly agreeing to the transmittal of preauthorization approvals;

• transmitting, causing to be transmitted and/or knowingly agreeing to the transmittal of materially false “reasonable” amount determinations and related explanation of such determinations, by means of telephone, facsimile and the Internet, in interstate commerce, for the purpose of effectuating the above-described false payment schemes, and each such transmission constituting a separate and distinct violation of 18 U.S.C. §1343;

• transmitting, causing to be transmitted and/or knowingly agreeing to the transmittal of uniform instructional and training literature to Allstate employees instructing them on how to reduce first-party Medpay claim payouts through the adversarial use of fee review, directing them to use fee review limits and exclusions, by means of telephone, facsimile and the Internet, in interstate commerce;

• transmitting, causing to be transmitted and/or knowingly agreeing to the transmittal of false reports to Plaintiffs and Class members that its reductions in amounts paid for medical service were based on usual, customary and reasonable


45

rates when, in fact, Allstate knew that its reductions were based on flawed and invalid Ingenix database; and

• regular and repeated communications between Allstate and Mitchell Medical, by means of telephone, facsimile, the Internet and mail, regarding the implementation, use and/or maintenance of the Decision Point software, and other similar assistance provided by Mitchell Medical.

121. Allstate used the U.S. Mail to send EOBs to Plaintiffs and the Class that showed

“reasonable” amount benefit reductions but did not sufficiently disclose the basis for Allstate’s

exclusion or reduction of charges, which prevented Plaintiffs and the Class from learning the

information needed to challenge or successfully appeal Allstate’s reasonable amount

determinations. Allstate concealed the methodology upon which it relied in determining

reasonable amounts, such as arbitrary selection of percentiles and use of undisclosed fee

schedules.

122. Collectively, these predicate acts constitute a long running pattern of racketeering

activity on the part of Allstate, Mitchell Medical and the Enterprise with the purposes delineated

above.

123. As demonstrated by the foregoing allegations, Allstate and Mitchell Medical, in

violation of 18 U.S.C. §§ 1341, 1343, 1961 and 1962, repeatedly and regularly used the U.S.

Mail and interstate wire facilities to further all aspects of the intentional underpayment to

Plaintiffs and the Class by delivering and/or receiving materials necessary to carry out the

scheme to defraud Plaintiffs and the Class.

124. Allstate’s representations and actions were knowingly false and misleading.

Allstate knew and recklessly disregarded that its methodology for establishing Medpay

reimbursements, which was to rely primarily on pre-selected arbitrary percentiles and Ingenix’s

fee schedules using Mitchell Medical and its Decision Point software, was inherently flawed; and


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that Allstate did not have a valid basis upon which to represent that the bills submitted by health

care providers’ were “greater than the reasonable and customary charge” or the “prevailing

charge level” or was “based on provider charges within” a particular geographic area.

125. The foregoing communications, sent via U.S. Mail and interstate wire facilities,

had the design and effect of preventing a meaningful evaluation and review of the Enterprise’s

“reasonable” reimbursement amount determinations, and/or otherwise were incident to an

essential part of Allstate’s and Mitchell Medical’s scheme to defraud Plaintiffs and the Class.

Further, Allstate and Mitchell Medical used these written communications to provide an

appearance of legitimacy and regularity, and/or postpone ultimate discovery and complaint of its

underpayment scheme for Medpay covered services, thereby making their discovery less likely

than if such mailings or wire transmission had taken place.

126. The above-described acts of mail and wire fraud are related because they each

involve common members, common Medpay claim practices, common results impacting upon

common victims, and are continuous because they occurred over several years, and constitute the

usual practice of Allstate, Mitchell Medica, and the Enterprise, such that they amount to and pose

a threat of continued racketeering activity.

127. If Allstate had not participated in the conduct of the Enterprise, Allstate could not

have saved the millions of dollars it did by using the Ingenix fee schedules for making

“reasonable” amount determinations even though it knew that they were flawed and invalid. By

using the Ingenix fee schedules for making its “reasonable” amount determinations,

misrepresenting them, through use of the U.S. mail and interstate wire facilities, as providing a

valid and unassailable basis for such decisions, and deterring its covered claimants from

challenging or otherwise raising questions over how it set “reasonable” amounts, Allstate was


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able to benefit substantially from its role in assisting the control and direction of the Enterprise,

along with Ingenix and Mitchell Medical.

128. Allstate issued false and misleading letters to providers regarding benefits, as well

as false and misleading EOBs. Allstate and Mitchell Medical made Medpay benefit reductions

that were contrary to the law.

129. In furtherance of its underpayment scheme, Allstate, in violation of 18 U.S.C. §§

1341, 1343, 1961 and 1962, repeatedly and regularly used the U.S. mail and interstate wire

facilities to further all aspects of the intentional underpayment to Plaintiffs and the Class by

delivering and/or receiving materials necessary to carry out the scheme to Individual Plaintiffs

and the Class.

130. The direct and intended victims of the pattern of racketeering activity described

herein are Plaintiffs and the Class, whom Allstate has underpaid for Medpay covered services.

131. Plaintiffs and the Class have been injured in their business and property as a

proximate result of Allstate’s and Mitchell Medical’s RICO violations because they were

underpaid substantial sums for necessary health care services they rendered to Allstate’s covered

claimants, and have been forced to exhaust significant time and resources addressing Allstate’s

wrongful practices. Allstate and Mitchell Medical further deprived Plaintiffs and the Class of the

knowledge necessary to adequately challenge the underpayments. The injuries incurred by

Plaintiffs and the Class were proximately caused by Allstate’s and Mitchell Medical’s violations

of 18 U.S.C. § 1962(c) because they were the foreseeable, direct, intended and natural

consequence of Allstate’s and Mitchell Medical’s RICO violations (and commission of

underlying predicate acts) and, but for Allstate’s and Mitchell Medical’s RICO violations (and


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commission of underlying predicate acts), Plaintiffs and the Class would not have incurred these

injuries.

132. Pursuant to Section 1964(c) of RICO, 18 U.S.C. § 1964(c), by reason of this

violation of 18 U.S.C. §1962(c), Plaintiffs and the Class are entitled to recover threefold their

damages, plus the costs of this suit and reasonable attorneys’ fees, and other appropriate relief.










COUNT IV (Allstate and Mitchell Medical)

(Violations of RICO, 18 U.S.C. §1962(d)) 133. Plaintiffs repeat and re-allege the preceding allegations set forth in the prior


134. During the Class Period, Allstate engaged in a conspiracy with Mitchell Medical

and Ingenix through the formation of and participation in the conduct of the Enterprise to commit

the mail and wire fraud identified in Count III.


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135. Pursuant to the license agreement Allstate entered into with Mitchell Medical

when it purchased Mitchell Medical’s Decision Point software, Allstate receives continuous

customer support and other services from Mitchell Medical regarding the use and maintenance of

the Decision Point software.

136. Allstate and Mitchell Medical were aware of the existence of the overall scheme

and of the participation of each other and Ingenix, and the benefits of each were dependent upon

the success of the broader fraudulent venture to systematically under-pay covered claimants by

use of arbitrary percentiles and undisclosed fee schedules. Allstate and Mitchell Medical

committed the acts alleged above in facilitation of the case-wide conspiracy.

137. Plaintiffs and the Class have been injured in their business and property as a

proximate result of the violation of 18 U.S.C. §1962(d) as detailed hereinabove, in that they have

been under-paid substantial sums for necessary services rendered to Allstate covered claimants.

138. Pursuant RICO, 18 U.S.C. § 1964(c), by reason of this violation of 18 U.S.C.

1962(d), Allstate and Mitchell Medical are liable for all the damages incurred by Plaintiffs and

the Class, trebled, plus costs of this suit and reasonable attorneys’ fees, and other appropriate

relief.






amount to be determined at trial;


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D. Awarding Plaintiffs and Class prejudgment interest on any damages awarded by the Court;

E. Awarding Plaintiffs and Class reasonable attorneys’ fees and costs of this



JURY DEMAND

Plaintiff demands a trial by jury on all issues so triable.


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DATED: May 4, 2012 Respectfully submitted,

D. M. ROBINSON CHIROPRACTIC, S.C. and M. W. WIDOFF, D.C, P.C., Class Plaintiffs,

By: _/s/ Jeffrey A. Leon One of Its Attorneys Jeffrey A. Leon Jamie E. Weiss Grant Y. Lee COMPLEX LITIGATION GROUP LLC 513 Central Avenue, Suite 300 Highland Park, Illinois 60035 (847) 433-4500 Richard J. Burke COMPLEX LITIGATION GROUP LLC 1010 Market Street, Suite 660 St. Louis, Missouri 63101 Stephen I. Leshner STEPHEN I. LESHNER, P.C. 1440 East Missouri Ave., Suite 265 Phoenix, Arizona 85104 D. Brian Hufford Robert J. Axelrod Jay Dean POMERANTZ HAUDEK GROSSMAN & GROSS LLP 100 Park Avenue New York, New York 10017 Kevin T. Hoerner Alvin C. Paulson BECKER, PAULSON, HOERNER & THOMPSON, P.C. 5111 West Main Street Belleville, Illinois 62226 (618) 235-0020 Counsel for Plaintiffs and Proposed Class


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CERTIFICATE OF SERVICE

I hereby certify that on May 4, 2012, I electronically filed the foregoing paper with the Clerk of the Court using the ECF system which will send notification of such filing to counsel of record. By: /s/ Jeffrey A. Leon Jeffrey A. Leon

COMPLEX LITIGATION GROUP LLC 513 Central Avenue, Suite 300 Highland Park, Illinois 60035 (847) 433-4500


15 Allstate Complaint

Documents

Transcript of 15 Allstate Complaint