Insurance Business Magazine: Allstate pursues $305,000 insurance fraud claims in New York lawsuit

By: Tez Romero

Allstate is taking a stand against alleged insurance fraud, filing a federal lawsuit claiming it was hit with more than $305,000 in bogus medical equipment bills. 

On Aug. 25, Allstate Insurance Company, along with Allstate Fire and Casualty Insurance Company, Allstate Indemnity Company, and Allstate Property and Casualty Insurance Company, filed a complaint in the Eastern District of New York against A to Z Supply Services Inc. and its principal, Michael Pogrebinsky, as well as unnamed John Does and ABC Corporations. The case, now pending, focuses on claims that the defendants engaged in a scheme to defraud automobile insurers –  including Allstate – through New York’s No-fault system, starting in January 2021 and continuing through the date of the filing. 

According to the complaint, A to Z Supply Services Inc., managed and controlled by Pogrebinsky, allegedly worked with medical clinics in the New York metropolitan area, including Kings and Queens counties. Allstate alleges that these clinics prescribed large amounts of nearly identical durable medical equipment and orthotic devices –  such as cervical pillows, traction units, heat lamps, lumbar cushions, and back braces – to patients involved in automobile accidents, regardless of medical necessity. The prescriptions, Allstate claims, were often generic and dictated by A to Z, rather than tailored to individual needs. 

Allstate says that A to Z submitted thousands of claims for reimbursement, using these generic prescriptions to bill for equipment at rates well above what was permitted under New York’s No-fault Law and related Medicaid and Workers’ Compensation fee schedules. The complaint states that A to Z purchased inexpensive equipment in bulk and misrepresented its nature, quality, and cost on the claims submitted to Allstate. The insurer also alleges that supporting documentation, such as delivery receipts and invoices, was either omitted or contained insufficient detail to verify what was actually provided. 

The complaint further alleges that A to Z and Pogrebinsky paid kickbacks or other forms of compensation to the clinics in exchange for the prescriptions. In some cases, Allstate claims, patients signed delivery receipts at the clinics, even if no equipment was actually provided at that time. These signed receipts were then submitted to Allstate as proof of delivery. 

Allstate is seeking to recover more than $305,000, the amount it claims was paid out on fraudulent claims. The company is also asking the court for a declaration that it is not obligated to pay any of A to Z’s outstanding No-fault claims, citing alleged misrepresentations and fraudulent conduct. The complaint references the regulatory framework governing DME reimbursement in New York, including the requirement that reimbursement amounts are capped by the Medicaid DME Fee Schedule or, for items not listed, the lesser of acquisition cost plus 50 percent or the usual and customary price charged to the public. 

The complaint includes examples of multiple patients involved in the same accident receiving nearly identical prescriptions and billing codes, regardless of their injuries or circumstances. Allstate claims this pattern is evidence of a predetermined protocol, not individualized medical care. 

As of now, these are allegations set out in a complaint. The defendants have not yet responded in court, and no decision has been made. The case, filed on August 25, 2025, remains pending in the United States District Court for the Eastern District of New York, under case number 25-CV-4712. 

For those in the insurance industry, this case is a reminder of the importance of documentation, verification, and vigilance in claims processing. Allstate’s experience, as described in the complaint, highlights the challenges insurers face in detecting and preventing fraud within complex provider networks and regulatory systems. The outcome of this case could have implications for how insurers approach fraud prevention and claims management in the future.