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

Mealey's Insurance Fraud

August 18, 2023
11th Circuit Affirms Health Care Fraud Convictions And Restitution Order

ATLANTA — The 11th Circuit U.S. Court of Appeals on Aug. 17 affirmed defendants’ health care and mail fraud convictions and restitution and forfeiture orders stemming from their involvement in a scheme to submit bills to insurance companies for medically unnecessary prescriptions for a compounding pharmacy’s drugs, but vacated and remanded one of the defendant’s aggravated identify theft convictions, finding that using another person’s identity information “was merely ancillary to the health care fraud.”
August 17, 2023
Insurers Query Medical Coding Expert’s Role In Lab Testing Compensation Case

BRIDGEPORT, Conn. — A medical coding expert’s testimony lacks relevance in a case that turns on the medical necessity of labs’ drug testing, and the expert is not qualified to opine about internal codes used to deny claims, insurers tell a federal judge in Connecticut in seeking to exclude the opinions.
August 17, 2023
Stay Granted In Marine Insurance Dispute Over Material Misrepresentations

SEATTLE — A Washington federal judge granted a trust’s motion to stay a marine insurer’s suit against it, seeking a declaratory judgment that the trust’s marine insurance policy on its sailboat is void due to alleged material misrepresentations, finding that factors weigh in favor of granting a stay pending resolution of Great Lakes Ins. SE v. Raiders Retreat Realty Co., LLC, a case scheduled for argument before the U.S. Supreme Court.
August 16, 2023
4th Circuit Vacates District Court Dismissal Of FCA Suit Against Walgreens

RICHMOND, Va. — The Fourth Circuit U.S. Court of Appeals on Aug. 15 vacated and remanded a district court decision dismissing a suit filed by federal and state governments alleging violations of the False Claims Act (FCA) and Virginia law, saying the court erred in finding that the governments did not “plausibly allege facts that establish materiality” regarding Walgreens’ alleged misrepresentation that certain patients met Medicaid eligibility requirements for hepatitis C drugs.
August 16, 2023
Chapter 11 Filings Sideline Bid For Injunctive Relief In Aid Of Foreign Arbitration

NEW YORK — A suit seeking injunctive relief in aid of foreign arbitration in a dispute involving reinsurance has been placed on the suspense docket of a New York federal court, with a judge on Aug. 15 saying counsel for Vesttoo Ltd. and its subsidiaries “reported that all respondent entities have filed for bankruptcy.”
August 15, 2023
Doctor Asks 4th Circuit To Set Aside $5.5M Conditional Judgment In FCA Suit

RICHMOND, Va. — A physician and his wife urge the Fourth Circuit U.S. Court of Appeals to set aside a $5.5 million consent judgment entered by a district court against them after they entered into a settlement agreement with the federal government and state of North Carolina in a suit alleging violations of the federal False Claims Act (FCA) and North Carolina False Claims Act (NCFCA), arguing, in part, that the lower court erred by dismissing their motion to set aside the judgment without a hearing.
August 15, 2023
Insurer Says District Court’s Ruling On Misrepresentations Must Be Reversed

ATLANTA — A district court’s ruling that an insurer could not demonstrate reliance upon its insureds’ fraudulent misrepresentations regarding mold damage in an insured hotel must be reversed because the district court failed to view the evidence in the insurer’s favor as the nonmoving party, an insurer argues in a cross-appeal reply brief filed in the 11th Circuit U.S. Court of Appeals.
August 15, 2023
Texas Settles Whistleblower Drug Fraud Claims Against Drugmakers For $42M

AUSTIN, Texas — The Texas Attorney General’s Office said in a press release that its Civil Medicaid Fraud Division has settled whistleblower claims involving the prescription drug Vyvanse against drugmakers Shire PLC, Baxter International Inc., Baxalta Inc., Viropharma Inc., Takeda Pharmaceuticals USA Inc. and Takeda Pharmaceuticals America for more than $42 million.
August 11, 2023
Man Convicted Of Care Home Fraud Seeks High Court Review Of $38M Forfeiture Order

WASHINGTON, D.C. — A man convicted of fraud, bribery and money laundering and ordered to forfeit $38.7 million related to a health care scheme involving bribing physicians to have patients entered into assisted living and skilled nursing facilities that he owned filed a petition for a writ of certiorari with the U.S. Supreme Court, asking the court to review whether a court, rather than a jury, may conduct fact finding to determine the amount to be forfeited.
August 10, 2023
Judgment Granted For Insurance Agency In Fraud Suit Filed By Workers’ Comp Insurer

WILLIAMSPORT, Pa. — A Pennsylvania federal judge granted summary judgment to an insurance agency in a fraud suit filed by a workers’ compensation insurer against it related to coverage on behalf of the agency’s customer, finding that because the insurer failed to act on its knowledge that the agency knew, through its access to an insurance database, that false information was submitted on the customer’s insurance application, the insurer’s claims were untimely.
August 09, 2023
Judge Dismisses Claims In FCA Suit Against Walgreens Over Alleged ‘Coupon Scheme’

MIAMI — A Florida federal judge on Aug. 8 adopted in part a federal magistrate’s report recommending partial dismissal in a federal False Claims Act (FCA) suit filed on behalf of the U.S. government against Walgreens related to its alleged Medicare fraud, finding that while no party challenges the magistrate’s recommendation to dismiss claims related to a medication therapy management scheme, the coupon scheme should also be dismissed under the doctrine of the first-to-file bar.
August 08, 2023
New York Justice Affirms Medical Provider’s Arbitration Award In No-Fault Row

BROOKLYN, N.Y . — A New York justice in an opinion filed Aug. 7 affirmed an arbitration award issued to a medical provider acting as an assignee of no-fault insurance benefits while alleged to be member of a fraud ring, finding that though the master arbitrator’s “award was incomplete” for failing to address the insurer’s legal issue that was previously addressed by another arbitrator, the justice was “constrained to uphold his award because the ultimate determination affirming” the previous arbitration “was not irrational.”
August 08, 2023
Arizona High Court: Insurer Can’t Challenge Life Policy After 2-Year Period

PHOENIX — A unanimous Arizona Supreme Court answered in the negative a question certified to it from a federal court asking whether an insurer can challenge a life insurance policy’s validity based on the lack of an insurable interest after the two-year statutory contestability period expires, finding that under Arizona law, the only permitted challenges to a policy’s validity after the period expires are those for nonpayment of premiums.
August 08, 2023
Judge Dismisses Case After Parties Settle In Row Over Coverage For Fire Damage

NEWARK, N.J. — A New Jersey federal judge dismissed a suit filed by an insured against his insurer after the insurer denied his claim for fire-related damages in a building with both commercial and residential tenants, finding that dismissal is appropriate because the parties reported settling the case and have not filed documents to terminate the case within the 60-day period as ordered by the court.
August 07, 2023
Health System Urges Magistrate Not To Reopen ‘Long-Deceased’ FCA Suit

NEW YORK — A state health system urged a New York federal magistrate judge not to grant a whistleblower physician’s motion to reopen a federal and state false claims act violations suit alleging fraudulent Medicare and Medicaid billing by the health system, asserting that there is no evidence that the alleged misconduct “deceived the Court” in the “long-deceased” case.
August 07, 2023
Vacatur Of $122M Arbitration Award Denied In Insurance Fraud Suit Over Drug Pricing

LOUISVILLE, Ky. — A Kentucky federal judge on Aug. 4 denied Rite Aid’s request to vacate a $122,564,346 arbitration award against Rite Aid in Humana’s suit seeking to confirm the award, finding in part that the arbitrator did not disregard the law related to claims against Rite Aid for breach of contract and fraud regarding its usual and customary (U&C) pricing.
August 04, 2023
9th Circuit Reverses FCA Dismissal, Says Public Disclosure Bar ‘Not Triggered’

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Aug. 3 reversed and remanded an order dismissing a relator’s qui tam suit alleging violations of the federal False Claims Act (FCA) against pharmaceutical companies related to their alleged fraud by artificially inflating drug prices, finding that the suit was not precluded by the public disclosure bar because none of the public disclosures “made a direct claim” that the pharmaceutical companies committed fraud.
August 02, 2023
Motion To Compel Discovery Of Communications Granted In FCA Suit Against Medtronic

KANSAS CITY, Kan. — A Kansas federal magistrate judge granted Medtronic and its related company’s motion to compel discovery in a relator’s qui tam suit alleging that they violated the federal False Claims Act (FCA) by participating in a scheme to provide medically unnecessary treatment resulting in the submission of false claims for payment to federal health care programs, finding that the requested communications are relevant and not privileged.
August 01, 2023
11th Circuit Affirms Order Granting Intervention In FCA Suit Against Pharmacy

ATLANTA — The 11th Circuit U.S. Court of Appeals on July 31 affirmed a district court order granting the U.S. government’s motion to intervene and dismiss a qui tam suit alleging that a pharmacy and its owners participated in a scheme to submit fraudulent claims for payment to federally funded health care programs in violation of the federal False Claims Act (FCA), finding that the government “gave good grounds” for seeking to dismiss the suit after it had earlier declined to intervene.
August 01, 2023
Summary Judgment On False Claims Act Counts Disputed In Crop Insurance Case

YAKIMA, Wash. — Opposing the government’s bid for summary judgment on counts asserted under the False Claims Act (FCA), a farmer argues in Washington federal court that the crop insurance row “stems from an essential misunderstanding of facts by the Plaintiff and conflation of various entities with” his “personal involvement.”
July 31, 2023
Dismissal Recommended In Wells Fargo Row With Insurer Over Possible STOLI Policies

GREENSBORO, N.C. — A North Carolina federal magistrate judge on July 28 recommended dismissing a suit filed by Wells Fargo Bank against an insurer, seeking a judgment as to validity of certain life insurance policies, finding that the court lacks jurisdiction because the complaint fails to show that the insurer is more likely to challenge the policies at issue as stranger-oriented life insurance (STOLI) policies “than any other life insurance policy it has issued.”
July 28, 2023
7th Circuit Remands, Applies FCA ‘Proper Scienter Standard’ Clarified By SCOTUS

CHICAGO — The Seventh Circuit U.S. Court of Appeals on July 27 vacated the judgments of a district court and remanded “in light of the U.S. Supreme Court’s clarification” regarding scienter and the high court’s finding that knowledge of submitting claims for pricing that was not usual and customary sufficed to show scienter in consolidated cases against pharmacies accused of fraudulently overcharging Medicare, Medicaid and the Federal Employee Health Benefits Program for prescription drugs in violation of the False Claims Act (FCA).
July 28, 2023
Judge Tosses Count For State False Claims In Pharmacist’s Suit Against Hospital

HAMMOND, Ind. — An Indiana federal judge granted a hospital’s motion to dismiss its former pharmacist’s allegations of state false claims and whistleblower protection law violations, finding that the pharmacist who alleged that she was fired due to her refusal to unlawfully participate in a federal drug discount program failed to show a connection between the hospital’s participation in the program and the state’s Medicaid program.
July 26, 2023
Reconsideration Of Report On Property Attachment Denied In No-Fault Fraud Dispute

BROOKLYN, N.Y. — A New York federal magistrate judge in a July 25 text-only order on the docket denied a billing company owner’s request to reconsider a report recommending prejudgment attachment of the owner’s property up to $576,040.41 in GEICO’s suit alleging fraudulent billing for unnecessary medical treatment for no-fault accident victims, finding that the owner failed to provide any new evidence or show errors in the court’s reasoning to justify reconsideration.
July 25, 2023
Texas High Court Accepts Certified Question As To TPPCA In Tornado Coverage Dispute

AUSTIN, Texas — The Texas Supreme Court accepted a certified question from the Fifth Circuit U.S. Court of Appeals in an insured’s lawsuit alleging that its insurer violated the Texas Prompt Payment of Claims Act (TPPCA), agreeing to answer whether an insurer’s payment of a full appraisal award for tornado damage plus any possible statutory interest bars the insured’s recovery of attorney fees.