Sarasota chiropractor Gary Kompothecras, who built a chain of car-crash clinics into a multimillion-dollar empire, has filed a libel suit over a Bloomberg News article published in November 2011 accusing him of unethical business practices.
In addition to Bloomberg and its reporter David Armstrong, defendants include two former patients quoted in the article and Allstate Insurance Co. The suit accuses them of conspiring "to publish an outlandish hit piece maliciously asserting defamatory lies," as reported by the Sarasota Herald-Tribune (paywall alert).
The lawsuit accuses Allstate of engaging in "a surreptitious scheme" to close down Kompothecras' clinic chain, called Physician's Group, and his medical-referral network, 1-800-ASK-GARY.
The article in question, published Nov. 11, 2011, said Florida's Division of Insurance Fraud was conducting a criminal investigation into accident-referral services and that the ASK-GARY network was one of the ones under scrutiny. It said the referral service sent patients to the Physician's Group clinics, where tests and treatment were given whether they were needed or not until insurance coverage was milked dry.
The article drew attention in part because Kompothecras was at the time a co-chair of the finance team for Republican presidential candidate Mitt Romney. Four days after it appeared, Florida's Chief Financial Officer Jeff Atwater called for an end to the 1-800 accident referral services, saying they had driven up the cost of treating accident victims and the price of insurance.
It helped reporter David Armstrong win first place in beat reporting for 2011 in a prestigious contest held by the Association for Health Care Journalists.
And it figured in a push for reform of the no-fault insurance laws in the 2012 Legislature. The coverage available for minor crashes was sharply curtailed, and both massage therapy and acupuncture were eliminated.
Courts have raised concerns that the law might be unconstitutional, prompting legislative committees preparing for the 2014 session to consider bills that would do away with no-fault auto insurance altogether, as Health News Florida reported last week.
In addition, State Farm auto insurer sued "Ask-Gary" in July, saying many of the claims it paid were bogus. Last month, the Office of Insurance Regulation ordered Kompothecras' auto-insurance company, AGIC Inc., to stop writing new business, saying it was not clear that AGIC had enough funds to pay future claims.
