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Insurance Fraud Suit Prompts Call For More State Oversight Of Rehab Centers

The Allstate Insurance Co. is suing a South Florida brain injury rehab center to recover almost $8 million in fraudulent claims. The Florida Institute for Neurologic Rehabilitation, or FINR, is also being investigated for accusations of resident abuse and is being cited for illegally housing 50 people.

But lawyers for FINR say it has an exemplary record of care and they’re confident it will be cleared of any wrongdoing.

A Bloomberg News investigation into FINR found that, since 1998, the rehab center has been suspected of abuse or neglect in five resident deaths. And the Department of Children and Families has verified 37 abuse incidents since 2005. But last year, when a 24-year-old woman died, the state dropped its investigation after concluding it didn’t have significant legal power in the case.

FINRs lawyer, Jay Adams, says it’s a zero-tolerance facility.

“Anyone who has an allegation of abuse made against them is immediately suspended from contact with the residents. Anyone who has a verified complaint is immediately fired. Most of the verified complaints actually have been called in by FINR itself," he says.

But Disability Rights Florida CEO Bob Whitney says his group is so concerned, it’s requesting an emergency meeting with state healthcare regulators at the Agency for Health Care Administration, or ACHA.

“There may very well be a need for some more robust statute. Perhaps legislative effort to give the state the authority that we think they should be exercising," he says.

ACHA spokeswoman Molly McKinstry says, the state did a surprise investigation of FINR in early August, and they didn’t find abuse or neglect. But they are ordering the release of about 50 residents who, they say, violate FINR’s license as a so-called “transitional living facility.”

“Many residents do not appear to meet the definition of appropriate residents in a transitional living facility," she says. "In other words, they do not have brain or spinal cord injuries.”

Under state law, FINR can only treat people with those types of injuries, but its lawyer, Adams, is asking a judge to throw out the law and let the 50 people stay.

“We’re unable to see any reason why the state of Florida would say you’re allowed to get that treatment if you’ve had a traumatic head injury, but if your head injury is caused by non-traumatic causes, such as stroke or anoxia, then you’re not allowed to access the services," he says.

State regulators also say, they’re concerned the center isn’t planning to eventually release the people it’s supposed to be rehabilitating.  And that's exactly what Allstate charges in its fraud lawsuit against FINR and its CEO, Joe Brennick. It reads “FINR did nothing more than warehouse patients with no meaningful treatment or progress.” 

Patients are placed at FINR from all over the U.S. And the lawsuit also charges Brennick faked medical records for several Michigan patients while billing Allstate $1,000 per day per patient under Michigan’s unlimited personal injury protection law.

The suit also says FINR aggressively and falsely marketed its services in Michigan to attract patients to its Wachula, Fla., facility.

Walter Dartland, director of the Consumer Federation of the Southeast, says he wants the state to investigate whether other insurance companies or Medicare have been defrauded as well.

“We hope the statewide prosecutor out of the Attorney General’s Office, the Chief Financial Officer, Atwater, and the Insurance Fraud Division and the consumer advocate in the Insurance Department will also take a serious look at this," he says.

In addition to the $7.6 million in fraudulent claims Allstate is seeking, it’s also seeking triple that amount from Brennick under federal racketeering laws. If charged and found guilty in criminal court, he could go to prison.

Brennick declined an interview through his spokesperson, but his lawyer, Wayne Miller, provided a statement that reads “I'm confident that this matter will ultimately be resolved in FINR's favor but cannot go into the details of ongoing litigation"

Lawyers for Allstate also declined an interview but the suit says their fraud investigation continues, and they expect to seek further damages as new evidence comes to light.