Edina, Minn. medical imaging company sued for insurance fraud

A mobile medical imaging company based in Edina and 46 chiropractors in the Twin Cities are accused in a federal lawsuit of involvement in a kickback scheme that alleges fraudulent insurance claims. The civil lawsuit, filed Monday by Illinois Farmers Insurance Co. in federal court in Minnesota, accuses Mobile Diagnostic Imaging Inc. and its owner, Michael Appleman, of working with chiropractors to game the state’s no-fault auto insurance law. The alleged scheme involves a trailer that Mobile Diagnostic takes to chiropractors’ offices and parks nearby. Technologists use equipment in the trailer to provide MRI scans to patients, including car accident victims, the lawsuit says. Mobile Diagnostic has a rental agreement with each chiropractor, reimbursing the various clinics for the lease of office items including phones, Internet access and other services. But the lawsuit argues that Mobile Diagnostic operates out of a self-sufficient trailer and that it is often parked in lots and other areas not owned by the chiropractors it’s serving. The rental agreement, the lawsuit says, "is merely a pretext for paying kickbacks to (chiropractors) for the referrals of patients." Appleman, reached Tuesday, declined to comment. The insurance industry claims the alleged scam is a small part of broader insurance fraud in Minnesota, which it says has an outdated no-fault auto accident law.