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Liberty Mutual sues NY clinics over alleged $1.5M no-fault scheme
The insurer seeks to recoup more than $743,000 already paid and to obtain a declaration of no liability for more than $500,000 in pending claims.
Liberty Mutual and nine affiliated insurers have filed suit against a network of New York clinics, alleging an approximately $1.5 million no-fault billing scheme tied to alleged improper clinic control and licensing structures, according to the complaint described by Insurance Business.
The case, filed July 23, 2026, in US District Court for the Eastern District of New York, targets medical, chiropractic, acupuncture, physical therapy, and massage corporations operating out of four clinics, the filing says.
Liberty Mutual says licensed professionals were listed as owners on paper, while unlicensed operators allegedly “secretly owned, operated, and/or controlled” the clinics in alleged violation of New York law, and that the arrangement involved selling the use of professional licenses for compensation.
The insurers argue the clinics were not eligible to bill under New York no-fault rules because providers that fail licensing requirements, or allow unlicensed laypeople to control the practice, are ineligible for reimbursement, and they also allege the operators used predetermined treatment protocols regardless of patients’ symptoms, Insurance Business reports.