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

Mealey's Insurance Fraud

June 01, 2023
U.S. Supreme Court: FCA Falsity Shown By ‘Usual And Customary’ Pricing Knowledge

WASHINGTON, D.C. — A unanimous U.S. Supreme Court on June 1 ruled that 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) “could have the scienter required by the FCA if they correctly understood” the standard of “usual and customary” drug prices when billing Medicare and Medicaid and thought that “their claims were inaccurate.”
June 01, 2023
Judgment For Insureds Denied In Dispute Over ‘Fraudulent’ Fire Insurance Claim

MOCKSVILLE, N.C. — A North Carolina judge denied a chicken-processing plant owner’s motion for summary judgment on excess insurers’ recoupment and unjust enrichment counterclaims in a breach of contract, bad faith and deceptive trade practices suit against excess coverage insurers after a fire occurred at the plant, finding that a fact dispute remains regarding whether the fire loss claim included fraudulent misrepresentations.
May 31, 2023
New York Panel Affirms Order Denying Judgment For Insurer Seeking Policy Voidance

NEW YORK — A New York appeals court on May 30 affirmed a lower court order denying an insurer’s summary judgment motion in its suit seeking a declaration that the commercial excess liability policy issued to its insured is rescinded as void ab initio, finding that because the unsigned insurance application is inadmissible, the insurer failed to show that there were material misrepresentations on the application.
May 31, 2023
$12M Judgment Issued Against Diabetic Equipment Provider In FCA Suit Over Kickbacks

ALEXANDRIA, Va. — A Virginia federal judge granted the federal government’s motion for default judgment and awarded it $12,036,554.48 in its suit against a diabetic durable medical equipment (DME) supplier and its owner alleged to have violated the federal False Claims Act (FCA) and Anti-Kickback Statute (AKS) by purchasing Medicare beneficiaries’ prescriptions for DME, finding that the company is liable for “knowingly” violating the FCA by submitting false claims and is in default for failing to respond to the complaint.
May 30, 2023
Panel Affirms Conversion To Judgment In ‘The Starry Night’ Insurance Fraud Case

SACRAMENTO, Calif. — A California appellate court on May 26 affirmed a decision converting criminal restitution orders to civil judgments after homeowners pleaded guilty to insurance fraud in overstating their fire-related losses to include an original Vincent van Gogh “The Starry Night” painting, finding that the trial court correctly determined that it had statutory authority to convert restitution orders to civil money judgments.
May 26, 2023
Federal Judge Grants In Part Judgment For Insurer In Medical Coverage Dispute

SANTA ANA, Calif. — A California federal judge granted in part summary judgment to an insurer seeking a determination that a medical professions liability policy issued to its insured behavioral health provider provides no coverage in an underlying Oregon state court suit, finding that the provider breached the insurance contract by misrepresenting in a renewal application lack of awareness of a possible lawsuit following a former employee’s criminal conviction.
May 25, 2023
Judgment Denied In FCA Suit Against Pharmacy Accused Of Overcharging Medicare

SACRAMENTO, Calif. — A California federal judge denied summary judgment in a whistleblower’s suit against a pharmacy, alleging that it violated the federal False Claims Act (FCA) and the California False Claims Act (CFCA) by overcharging the state of California and federal government for Medi-Cal and Medicare Part D nursing home patients, finding that fact disputes remain as to the actual reason for firing the whistleblower.
May 24, 2023
Judge Grants Partial Dismissal In Relator’s FCA Suit Against Former Employer

ATLANTA — A Georgia federal judge dismissed in part a relator and former employee’s federal False Claims Act (FCA) suit against a durable medical equipment (DME) company and its manager alleging that the company and manager fraudulently billed the U.S. government for DME that was medically unnecessary, finding that the allegations failed to provide the type of specificity regarding medical billing as required under the FCA.
May 23, 2023
Michigan Panel Rules On Appeal Of No-Fault Coverage Denial In Auto Accident Suit

DETROIT — A Michigan Court of Appeals panel reversed and remanded a lower court order determining that a man was the constructive owner of an uninsured vehicle and therefore ineligible for personal protection insurance (PIP) benefits, finding that a question of fact remains regarding the vehicle’s ownership, but affirmed the dismissal of defendant Michigan Assigned Claims Plan (MACP) because it lacks the capacity to be sued.
May 17, 2023
8th Circuit Sets Oral Argument In Appeal Of Qui Tam Crop Insurance Case

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals has scheduled oral argument for June 13 in a revival bid by relators who had stood to receive about $300,000 before the trial court granted the government’s post-trial motion and vacated judgment in the qui tam crop insurance case.
May 15, 2023
$487M Judgment Entered In FCA Ophthalmology Suit Alleging 10 Years Of Kickbacks

ST. PAUL, Minn. — A Minnesota federal judge on May 12 entered a $487,048,705.13 judgement for treble damages and penalties to a whistleblower and the U.S. government after a jury awarded them more than $43 million in their suit against an ophthalmic supply company and its owner for violations of the False Claims Act (FCA) and Anti-Kickback Statute related to kickbacks paid to eye surgeons to use the company’s products for cataract surgeries paid for by Medicare.
May 15, 2023
Partial Dismissal Recommended In FCA ‘Coupon Scheme’ Suit Against Walgreens

WEST PALM BEACH, Fla. — A Florida federal magistrate judge issued a report and recommendation in a federal False Claims Act (FCA) suit filed on behalf of the U.S. government against Walgreens, asserting that it defrauded Medicare to increase its profits, finding that claims related to a “coupon scheme” satisfy the FCA element of scienter but that claims for a “medication therapy management scheme” are “speculative” and not supported by facts.
May 12, 2023
False Claims Damages Against Lilly Trebled, Civil Penalties Added For $193M Total

CHICAGO — An Illinois federal judge has granted a whistleblower’s motion to treble damages, impose civil penalties and to assess post-judgment interest in a Medicare drug rebate false claims case, a decision that brings to more than $193.06 million a judgment against Eli Lilly & Co.
May 11, 2023
Calif. High Court Declines Review Of Relator Appeal In IFPA Suit Against Hospital

SAN FRANCISCO — The California Supreme Court denied review of an appellate court decision affirming a lower court’s judgment for a hospital in the state of California’s qui tam lawsuit alleging that the hospital participated in kickbacks, patient steering and billing fraud schemes.
May 09, 2023
R.I. Justice Finds Policy Exclusion Ambiguous, Refuses To Dismiss Insureds’ Claims

PROVIDENCE, R.I. — A Rhode Island justice denied an insurer’s motion to dismiss insureds’ breach of contract and declaratory relief claims in its lawsuit seeking coverage under 2019 and 2020 Government Crime/Crime and Fidelity insurance policies, finding that a policy exclusion relied on by the insurer is ambiguous and that the insurer has failed to demonstrate that the insureds are not entitled to coverage “beyond a reasonable doubt” for their alleged more than $15 million loss of employment security benefits payments due to fraud.
May 09, 2023
Judge Denies Motion To Dismiss In Qui Tam FCA Suit Alleging Medicare Overbilling

DALLAS — Three days after a Texas federal judge denied health care providers’ motion to strike and dismiss a relator’s qui tam suit alleging Medicare overbilling in violation of the federal False Claims Act (FCA), the judge on May 8 filed an order granting the relator’s motion to file under seal its response to the provider’s motion to stay discovery.
May 08, 2023
Judge Rules On Assignee Summary Judgment Motion, Says No Insurance Fraud Exclusion

NEW YORK — A New York federal judge granted in part an insured’s assignee’s motion for summary judgment in its suit against insurer defendants, seeking coverage for the insured in an underlying action, finding “that there are no genuine disputes of material fact that coverage exists and that no exclusions apply” regarding purported fraudulent conduct, but that because the assignee failed to show bad faith, the parties are required to submit a joint letter to show the existence of remaining steps in this case.
May 05, 2023
N.C. Judge Denies Insurer’s Motion To Find Life Insurance Policy Void As STOLI

GREENVILLE, N.C. — A North Carolina judge on May 4 denied an insurer’s summary judgment motion in its suit seeking a determination that a life insurance policy it issued was void as a stranger-originated life insurance (STOLI) policy but granted the purchaser’s summary judgment motion, finding that the policy is not void absent a pre-issuance agreement to assign it to another party.
May 04, 2023
3rd Circuit Affirms Dismissal Of FCA Claims Against AmeriHealth In ACA Dispute

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on May 3 affirmed a district court’s dismissal of a relator’s suit alleging that AmeriHealth defrauded the federal government in violation of the federal False Claims Act (FCA) by falsely certifying compliance with New Jersey regulations, finding that certifying compliance was not required to receive payment for health insurance plans listed on New Jersey’s federally operated exchange pursuant to the Patient Protection and Affordable Care Act (ACA).
May 03, 2023
Magistrate Deems Interviews Privileged In FCA Suit Over 9-Year Medicare Fraud

WHITE PLAINS, N.Y. — A New York federal magistrate judge on May 2 denied skilled nursing facilities’ request for summaries of interviews in the government’s suit against the facilities and related parties for alleged violations of the federal False Claims Act (FCA) in submitting false claims to Medicare “for excessive rehabilitation services,” finding that though the work-product privilege does not prevent “limited disclosure” of the interviewees’ names, the interview summaries are protected by the privilege, to which no exception applies.
May 03, 2023
Partial Grant Issued To Insurer Over Fraud Alleged In Bad Faith Fire Dispute Claim

DENVER — A Colorado federal judge granted in part an insurer’s summary judgment motion in a homeowner’s bad faith and breach of contract suit against it after the insurer denied a claim for coverage following an electrical fire, finding that the motion is granted as to the bad faith and unreasonable denial claims because the insurer’s “conduct was reasonable” when it deemed her policy void for failing to tell the insurer that she no longer resided at the property.
May 02, 2023
ACA Asbestos Program Suit Parties Parry Bid To Quash Subpoenas To U.S. Agencies

MISSOULA, Mont. — The United States says in a motion to quash that an agency already produced almost all the information two subpoenas seek and that further searches into whether a medical facility meets the criteria for “qualified physicians” under a special Patient Protection and Affordable Care Act program involving Libby, Mont., asbestos exposures “will simply waste time while yielding ever diminishing returns.” But in a joint response, the parties in the federal litigation in Montana say the subpoenas are not burdensome and that to the extent the answers to the subpoena questions are self-evident, the questions should be easy to answer.
May 02, 2023
Magistrate Recommends Denial Of Attorney Fees In GEICO’s Suit Against Repair Shop

TAMPA, Fla. — A federal magistrate judge issued a report and recommendation stating that attorney fee requests should be denied in GEICO’s suit alleging that a windshield repair shop and its owners committed fraud and violated the Florida Motor Vehicle Repair Act by submitting insurance claims for repairs that were unnecessary or not performed, finding that “the ends of justice are best served” by denying the motions and allowing them to be refiled after the resolution of GEICO’s appeal to the 11th Circuit U.S. Court of Appeals.
May 02, 2023
Relator’s Motion To Depose Actuaries Granted In FCA Suit Alleging False CMS Bids

LOUISVILLE, Ky. — A Kentucky federal magistrate judge granted a relator’s motion to depose actuaries in a False Claims Act (FCA) suit alleging that Humana Inc. knowingly submitted false bids to the Centers for Medicare and Medicaid Services (CMS), resulting in overpayment to Humana, finding that though the additional depositions “may prejudice Humana by diverting time and resources from trial preparation, the stakes in this litigation are substantial and the potential benefit of the discovery outweighs Humana’s burden.”
May 01, 2023
Judge Denies Dismissal In Insurance Fraud Suit Seeking Relief Under ERISA, UCL

LOS ANGELES — A California federal judge denied surgery centers’ dismissal in a cheese manufacturing company’s suit against them for alleged fraudulent billing for health care benefits related to unnecessary or unperformed medical services, restitution under the Employee Retirement Income Security Act and violations of California’s unfair competition law (UCL), finding that the fraud and UCL violations claims show alleged fraud and that the company established its fiduciary status under ERISA.