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Allstate Sues Fla. Brain Injury Rehab Center For $7.6 M In Insurance Fraud

A South Florida brain injury rehab facility, already being cited for improperly keeping non-brain-injured patients and being investigated for abuse, is now being sued for alleged widespread and intentional fraud. 

Allstate Insurance filed the suit in federal court against the Florida Institute for Neurologic Rehabilitation on Friday.

The suit alleges patients were "warehoused" past their needed treatment while the facility falsified medical records and fraudulently billed Allstate up to $1,000 per patient per day.

Walter Dartland, executive director of the Consumer Federation of the Southeast, says he’s been advocating for an investigation at the institute since Bloomberg News began reporting on patient-abuse allegations in July.

“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.

Allstate alleges the rehab center took advantage of Michigan’s limitless personal injury protection law and made $7.6 million in fraudulent claims.  It also says the institute aggressively marketed and falsely represented its services in Michigan to attract patients to the Wauchula, Fla., facility. Under federal law, Dartland says, the alleged fraud could land the facility’s owner, Joe Brennick, in prison.

Brennick is already in the midst of responding to last week’s report from state healthcare regulators, ordering the release of about 50 patients because they do not have traumatic brain injuries and shouldn’t be at a so-called "transitional" facility.

Agency for Healthcare Administration Deputy Secretary Molly McKinstry says an investigation in early August turned up other concerns as well.

“Another finding included a staff member who did not qualify for employment based on their criminal background," she says.

The state investigation was prompted by abuse allegations, including an alleged videotaped beating of a brain-damaged patient that resulted in the arrests of two staffers, released by Bloomberg News.

Attorney for the rehab home, Jay Adams, says the center voluntarily turned that video over to law enforcement when it fired the caretakers. And, although the Department of Children and Families has verified 37 incidents of abuse since 2005, and has 15 investigations ongoing, “Anyone who has a verified complaint is immediately fired. Most of the verified complaints actually have been called in by FINR itself in its role as the protector of its residents."

CEO Joe Brennick was unavailable for an interview but responded with the following statement through a spokesperson: "The Florida Institute for Neurologic Rehabilitation (FINR) continues to believe that recent, negative media attention is being drummed up by third parties whose only mission is to harm FINR's reputation and impair the facilities’ ability to treat its patients."

Brennick told the Associated Press he believes that the fertilizer company, CF Industries, is trying to discredit the facility before a coming decision by Hardee County officials on whether the company will be allowed to mine for phosphate nearby.

But the consumer federation, which pushed for the investigation, says the proposed mining permit had nothing to do with it.

The institute has until Sept. 4 to respond to the state regulators’ report.