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

Mealey's Insurance Fraud

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.
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.