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Allstate sues AHCS subsidiary Prescription Partners

Allstate Insurance has filed suit in Federal Court against Prescription Partners, the billing entity owned with Automated Healthcare Solutions.

The suit was filed in the Eastern Michigan Federal District Court; here are a couple of the more salient assertions in the suit:

4. Allstate seeks a declaration that it is not obligated to pay any claim for PIP benefits submitted to it by Prescription Partners, including pending claims in excess of $81,021.

5. Allstate further seeks restitution from Prescription Partners in the amount by which Prescription Partners has been unjustly enriched, an amount in excess of $25,085.

6. Prescription Partners does not provide any products, services, or accommodations relative to an injured person’s care.

7. Prescription Partners is not a healthcare provider and does not in any way treat injured persons…

10. Prescription Partners’s actions in this regard are both not permissible under the clear language of the No-Fault Act and are violative of the purpose and goal of Michigan’s No- Fault Act.

11. By this Complaint, Allstate seeks a declaration that Prescription Partners has no right to submit such claims to Allstate and that Allstate has no obligation to pay claims for PIP benefits made by Prescription Partners.

Sources indicate there are several other large auto insurers tracking this case closely; other legal action may be in the offing.

The case is focused on Prescription Partners’ alleged activity related to Allstate’s auto insurance business in Michigan. Unlike every other state, Michigan has unlimited medical benefits for those injured in auto accidents.  This make it a very attractive target for physicians dispensing drugs, as there are no limits on the insurers’ liability.  Interestingly, there is somewhat less interest among physicians in dispensing to auto claimants in other states, where maximum medical benefits may be as low as $5000 or $10,000.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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