Mealey's Insurance Fraud : Mealey's : Legal News & Analysis

Mealey's Insurance Fraud

July 05, 2023
Judge Grants Default For Insurer, Says Insured Didn’t Disclose ‘Material Changes’

TAMPA, Fla. — A Florida federal judge on July 3 adopted a magistrate judge’s report and recommendation to grant default judgment and enter a declaratory judgment for the insurer in a suit against its insured, the driver and an injured passenger from another vehicle, finding that the insurer has no duty to defend, cover or indemnify its insured in an underlying suit related to a March 2021 accident because the insured failed to notify the insurer of “material changes” such as her change of address.
July 03, 2023
Magistrate Rules On GEICO’s Motion To Amend PIP Fraud Suit Against Surgery Center

TRENTON, N.J. — A New Jersey federal magistrate judge granted in part GEICO’s motion to file a second amended complaint in a suit against a surgery center and its affiliates alleging fraud related to personal injury protection (PIP) claims, finding that because GEICO had prior access to information in statutorily required assignment of benefits forms, it may not amend the complaint as to the forms but can amend on related issues, including claims against a chiropractor affiliated with the surgery center.
July 03, 2023
Panel Affirms Judgment For Insurer, Says Policy’s Fraud Terms Apply To Assignee

LAKELAND, Fla. — A Florida appellate court on June 30 affirmed a trial court’s order granting judgment for a homeowners insurer in a breach of contract suit filed against it by a roofer that replaced the homeowners’ hurricane-damaged roof, finding that though the roofer was an assignee of the insureds, it was subject to the policy’s fraud conditions.
July 03, 2023
U.S. High Court Vacates 11th, 4th Circuit Decisions That Affirmed FCA Dismissal

WASHINGTON, D.C. — The U.S. Supreme Court on June 30 issued a summary disposition, vacating and remanding 11th and Fourth U.S. Circuit Courts of Appeals decisions that affirmed dismissal of qui tam suits alleging violations of the federal False Claims Act (FCA) by violating Medicare rules or Medicaid price reporting, “in light of the decision” in United States ex rel. Schutte v. SuperValu Inc., Nos. 21-1326, 22-111, U.S. Sup. (2023).
June 29, 2023
Montana Jury Finds Against Screener In ACA-Asbestos Medicare Program Fight

MISSOULA, Mont. — A Montana jury on June 28 found that a medical screening company violated the False Claims Act (FCA) by knowingly submitting fraudulent asbestos-disease claims under a provision of the Patient Protection and Affordable Care Act (ACA) Medicare program designed for residents of Libby, Mont., and awarded $1,081,265.
June 26, 2023
Judge Extends Time For Chiropractors’ Reply In $14M RICO And Insurance Fraud Suit

HOUSTON — A Texas federal judge granted chiropractors and their affiliated practices an extension to reply in a suit filed against them by insurance companies seeking to recover more than $14 million in damages, asserting that the chiropractors and their practices participated in a fraudulent scheme regarding Racketeer Influenced and Corrupt Organizations Act (RICO) violations in billing the insurers for unnecessary or never performed procedures for personal injury protection (PIP) and uninsured motorist (UM) claims.
June 23, 2023
Panel Affirms Fire Loss Coverage Denial, Cites No Occupancy, Misrepresentation

NASHVILLE, Tenn. — A Tennessee appellate court affirmed a lower court’s determination that a homeowners insurance company properly denied a claim for fire-related property loss, finding the denial was supported by evidence showing that the property was unoccupied at the time of the fire, therefore precluding coverage, and that the policy was void because an insured misrepresented the items lost in the fire.
June 21, 2023
Federal Judge Dismisses FCA Suit Against PBM, Cites Public-Disclosure Bar

SAN DIEGO — A California federal judge dismissed a relator’s suit asserting that a pharmacy benefit manager (PBM) violated the False Claims Act (FCA) by enrolling beneficiaries of a federal government insurer in automatic delivery, resulting in beneficiaries receiving more drugs than medically necessary, finding that dismissal is warranted under the public-disclosure bar because a newspaper article and a U.S. Department of Defense rule “disclosed the allegedly fraudulent transactions at issue.”
June 21, 2023
7th Circuit: FCA Suit Properly Dismissed On Causation Grounds

CHICAGO — The Seventh Circuit U.S. Court of Appeals found that a former underwriter who alleged that a mortgage lender made false representations to the U.S. Department of Housing and Urban Development showed proof of materiality but failed to prove causation, affirming summary judgment in the lender’s favor and finding no error in the lower court’s rulings on expert testimony.
June 20, 2023
Judge Rules On Dismissal Motions In FCA Suit Alleging Fraudulent ACA Upcoding

SAN FRANCISCO — A federal judge in California denied an insurer’s motion to dismiss the federal government’s operative first amended complaint in intervention alleging federal False Claims Act (FCA) violations related to claims under the Patient Protection and Affordable Care Act (ACA) by upcoding, causing the government to overpay, finding that the government “sufficiently pled a factual falsity theory.”
June 16, 2023
Supreme Court Affirms Government’s Right To Dismiss FCA Suits Where It Intervened

WASHINGTON, D.C. — The U.S. government can move to dismiss a qui tam False Claims Act (FCA) suit in which it has intervened, regardless of whether the intervention occurred during the case’s initial seal period or at a later point, a U.S. Supreme Court majority held June 16.
June 14, 2023
Tennessee Panel Rules On Estate’s Claims For Life Insurance Fraud, Conversion

NASHVILLE, Tenn. — A Tennessee Court of Appeals affirmed in part a trial court decision finding for a decedent’s estate in its suit against his girlfriend for the proceeds of his life insurance policy, finding that the trial court did not abuse its discretion in determining that the beneficiary designation forms naming the girlfriend as sole beneficiary were not signed by the decedent.
June 06, 2023
COMMENTARY: State Laws Prohibiting Arbitration Of Insurance Disputes: Are They Pre-Empted by the New York Convention?

By Robert M. Hall
June 13, 2023
Relators Raise SuperValu In 8th Circuit Appeal Of Qui Tam Crop Insurance Row

ST. LOUIS — Relators who are asking the Eighth Circuit U.S. Court of Appeals to reverse vacation of judgment in a qui tam crop insurance case now contend that a recent U.S. Supreme Court decision “makes it clear” that a Minnesota federal court’s interpretation of “knowingly” “is not the correct legal standard.”
June 13, 2023
Motions To Dismiss, Amend, Transfer Or Stay Denied In Medicare Fraud Dispute

ATLANTA — A Georgia federal judge denied motions to dismiss, amend, transfer or stay in a company’s suit against radiologists who sold their practice to the company alleging that they breached their share purchase agreement by committing Medicare and Medicaid fraud, finding that the case and a Kentucky state court suit “involve distinct claims, obviating the risk of inconsistent judgments” and that the radiologists failed to show transfer is warranted because the parties agreed to litigate in Georgia courts.
June 09, 2023
Subsys False Claims Suit Against Pharmacy, Owners, Settles For $8.99M

LOS ANGELES — A California federal judge has dismissed with prejudice a False Claims Act (FCA) complaint after an investment fund signed an $8.99 million settlement of claims that a specialty pharmacy it owns filled prescriptions for off-label use of the opioid Subsys.
June 08, 2023
Supreme Court: Identity Theft Occurs When ID Use Is ‘At The Crux’ Of Criminal Act

WASHINGTON, D.C. — Violation of the federal aggravated identity theft statute happens when the unauthorized use of another person’s means of identification “is at the crux of what makes the conduct” at issue criminal, a U.S. Supreme Court majority ruled June 8, reversing a Fifth Circuit U.S. Court of Appeals’ ruling in the context of health care fraud and stressing that a broader interpretation of identity theft would transform “garden-variety overbilling” disputes that include the use of a patient’s identifying information into identity theft violations.
June 07, 2023
Nebraska Panel Says Fact Issues Remain In Row Over Insurance Policy Rescission

PAPILLION, Neb. — A Nebraska Court of Appeals panel on June 6 reversed and remanded a lower court’s order granting summary judgment to an insurer that asserted a defense of rescission for possible fraud in its insureds’ bad faith and contractual indemnity suit for failure to cover breast cancer treatments, finding that fact issues remain regarding the application of a preexisting condition exclusion.
June 07, 2023
Washington Panel Reverses In Row Over Tax Refund Garnished In Unemployment Fraud

SEATTLE — A Washington appellate court reversed and remanded a lower court decision granting judgment to a man who applied for and was paid unemployment insurance benefits, which the Washington State Department of Employment Security (ESD) deemed an overpayment, finding that ESD gave the man appropriate notice before it intercepted his federal tax refund and did not violate his due process rights under the 14th Amendment to the U.S. Constitution.
June 06, 2023
Dismissal Granted In Row Over Medicare Payments Suspended Due To Alleged Fraud

SAN DIEGO — A California federal judge dismissed without prejudice a suit filed against employees of a Medicare contractor accused of violations of the California Insurance Frauds Prevention Act and California unfair competition law after the employees suspended Medicare payments to a pain management clinic for allegations of fraud, finding that dismissal is proper because the clinic failed to exhaust its administrative remedies pursuant to the Medicare Act.
June 06, 2023
Split Michigan High Court Remands For Review Of Claim That Insurer Breached Duty

LANSING, Mich. — The Michigan Supreme Court reversed in part and remanded to the trial court an appellate court decision reversing summary disposition in an insured’s claim that an insurer and its agent “were negligent in not ensuring” coverage after rescinding the insured’s policy for material misrepresentations, finding that while the insured cannot show causation as to negligence, the trial court failed to consider the insured’s claim for breach of duty as to the failure to notify regarding the policy cancellation.
June 05, 2023
Case Management Order Issued In $8M Aetna Fraud Suit Against COVID Test Provider

GREENBELT, Md. — A Maryland federal magistrate judge on June 5 issued an order requiring parties to obtain consent before filing any motion in Aetna’s insurance fraud, unjust enrichment and negligent misrepresentation suit against a testing supplies provider and related parties, asserting that they participated in a scheme to improperly bill Aetna for more than $8 million for over-the-counter (OTC) COVID-19 testing supplies, resulting in higher reimbursements from Aetna’s Employee Retirement Income Security Act plans.
June 05, 2023
Mich. High Court Says Policy Rescission For Fraud Not Bar To No-Fault Recovery

LANSING, Mich. — A unanimous Michigan Supreme Court affirmed an appellate court’s determination that despite a woman’s auto insurer later rescinding her policy for fraud because she had no-fault coverage when she was purportedly injured in an accident, her third-party noneconomic claims against the driver of the car that allegedly rear-ended her car are not barred under Michigan’s no-fault law.
June 02, 2023
Judge Rules On Pain Clinic’s Dismissal Motion In Insurance Fraud Suit Against It

NEWARK, N.J. — A New Jersey federal judge denied in part a pain management clinic’s motion to dismiss and compel arbitration in GEICO’s suit against it alleging unjust enrichment, common-law fraud and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and New Jersey Insurance Fraud Prevention Act (IFPA) related to a purported scheme for billing unnecessary medical services for patients seeking no-fault coverage from GEICO, finding that the IFPA claim survives dismissal due to legislative intent supporting courts resolving those claims.
June 02, 2023
Detroit-Area Hospitals Settle FCA Claims Related To Alleged Kickbacks For $29.7M

ANN ARBOR, Mich. — A Michigan federal judge dismissed a qui tam suit filed against Detroit-area hospitals after they agreed to pay $29,744,065 to the government to resolve claims alleging violations of the federal False Claims Act (FCA) in providing the services of hospital employees to non-hospital physicians for low or no cost in violation of the Anti-Kickback Statute (AKS) and billing Medicare and Medicaid in violation of the Stark Law’s prohibition against self-referrals.