Allstate hits Mission chiropractors with $25M insurance fraud lawsuit

A Mission-based chiropractic network is facing a $25.8 million federal lawsuit after a major auto insurer accused the company of repeatedly billing for the same types of injury treatments to maximize payouts.

Allstate filed the lawsuit accusing Mission-based Khit Chiropractic, a growing practice in the Rio Grande Valley, of insurance fraud and racketeering.

Luis and Alejandra Khit co-own Khit Chiropractic & Wellness Center and several related entities. 

The husband and wife have been licensed chiropractors in Texas since 2004 and 2006, respectively, according to state licensing records. 

The company operates seven offices across the Rio Grande Valley, from Brownsville to Rio Grande City, along with two in Austin and a newly opened location in Kyle.

Neither a representative from Allstate nor Khit responded to a request for comment.

Attorneys for Allstate allege the Khits, along with affiliated chiropractors and a few doctors, operated a “cookie-cutter” practice that submitted near-identical claims for personal injury clients, including treatments performed by unlicensed assistants as well as X-rays, MRI scans, and other services.

Allstate alleges the Khits submitted more than 1,200 claims between 2018 and 2024, billing about $22 million and collecting $8.6 million through companies they controlled.

Nearly 200 different attorneys submitted claims to Allstate for patients seen by the Khit companies — the most prolific of which was J Gonzalez Law Firm, then Davis Law Firm. Both submitted more than 100 claims on behalf of their clients. 

The Allstate lawsuit is a Racketeer Influenced and Corrupt Organizations, or RICO, case, which means the company is seeking three times the value of the damage, or the $8.6 million it paid in claims, for a total of $25.8 million. 

Patients were often treated under what are known as letters of protection, or LOPs. These are agreements between a doctor and a patient’s attorney that allow the provider to be paid later, after a lawsuit related to the injury is settled. The practice is legal and commonly used in personal injury cases.

Allstate argues the agreements were used to justify higher medical bills, allowing patients to claim the full cost of treatment while providers sought payment at rates higher than what is typically paid by Medicare, Medicaid, or private insurance.

The lawsuit names Khit Chiropractic and Rehabilitation, Khit & Association, SKAK Investments doing business as Insight Diagnostics and Imaging Center, Kay Medical Center, Spinal Decompression and Remodeling Clinic, Elkay Transport, and Impact Professional Services. 

All of the businesses named in the lawsuit are owned and operated by the Khits, who are chiropractors but not licensed medical doctors.

The lawsuit alleges they hired nurse practitioners to provide medical care without a supervising physician, and allowed unlicensed chiropractic assistants to perform treatments that typically require a licensed provider, beyond basic tasks like applying ice packs or heating pads.

In 2019, chiropractor John Glade testified that the Khit center in Mission saw about 100 patients per day and the Brownsville location saw between 70 and 80, according to the lawsuit. 

Allstate claims patients were seen about 20 times on average at the Khit centers, primarily by chiropractic assistants. Each visit lasted 15 to 30 minutes and was billed at about $390.