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

Mealey's Insurance Fraud

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.
May 01, 2023
Judge Orders $147,364 Remittitur In $61.22M Lilly False Claims Verdict

CHICAGO — An Illinois federal judge has ordered a remittitur of $147,364 in a False Claims Act jury verdict against Eli Lilly & Co., but let the remainder of the original $61.22 million award stand in an opinion and order on the defendant’s post-verdict motions.
April 28, 2023
Federal Judge Grants Default In Insurer’s Suit Against Grounded Rum Runner’s Owner

CAMDEN, N.J. — A New Jersey federal judge granted GEICO Marine Insurance Co.’s (GMIC) motion for default judgment in a suit against its insured boat owner, seeking a declaration that it has no duty to provide coverage when the insured applied for insurance and claimed seaworthiness after his boat, a Luhrs Boat Cruiser Rum Runner, was already grounded and taking on water, finding no reason to suggest that the owner’s failure to answer the complaint “is due to anything other than Defendant’s willful negligence.”
April 27, 2023
Judge Dismisses FCA Claims Against Hospital In Medicare Fraud COVID Testing Suit

ATHENS, Ga. — A Georgia federal judge on April 26 dismissed relators’ qui tam suit against a hospital and pulmonary medicine practice accused of violating the federal False Claims Act (FCA) and Georgia False Medicaid Claims Act (GFMCA) for seeking payment from Medicare and Medicaid related to purported fraud in repeating COVID testing to create negative results, finding that the relators “failed to state a viable claim for worthless services.”
April 26, 2023
N.Y. Panel Affirms Ruling In Coverage Suit Arising From $141M Fraudulent Trading

NEW YORK — A New York appeals court on April 25 affirmed a ruling in a coverage dispute over an insured’s $141 million loss arising from fraudulent commodity futures trading activity, finding that the lower court correctly decreased the loss attributable to the excess insurers by the $117,020,287 amount the insured received from the settling insurers.
April 25, 2023
Judge Grants Stay In Insurer’s Bid For No Duty To Indemnify Over Rescinded Policy

SAN JOSE, Calif.— A California federal judge granted insureds’ request for a stay in an insurer’s lawsuit seeking a declaration that a directors and officers (D&O) insurance policy is rescinded because of the insureds’ material misrepresentations or a declaration that it has no duty to indemnify or defend in an underlying action, finding that discovery should be stayed until resolution of the underlying proceedings due to “the potential overlap in this rescission claim.”
April 24, 2023
Policy’s Plain Language Bars Coverage For Retaliation Claims, Panel Rules, Reverses

CINCINNATI — The Sixth Circuit U.S. Court of Appeals on April 21 held that a directors and officers, employment practices and fiduciary liability insurance policy’s application exclusion applies to an underlying qui tam complaint and precluded coverage for corresponding retaliation claims brought against the insured by its former employees, reversing a lower federal court’s grant of summary judgment in favor of the insured on its breach of contract and declaratory judgment claims and remanding for the lower court to enter judgment in favor of the insurer.
April 24, 2023
GEICO Seeks Extension After Settlement Notice In $2.1M No-Fault Fraud Suit

TAMPA, Fla. — Three days after GEICO filed a joint notice of settlement with a health care clinic in GEICO’s $2.1 million suit against the clinic and related parties for allegedly submitting fraudulent no-fault insurance charges, GEICO filed an unopposed motion for an extension to file a motion to amend.
April 20, 2023
Magistrate Grants Stay To Hospital In FCA Qui Tam Suit Alleging Medicaid Fraud

TAMPA, Fla. — A Florida federal magistrate judge granted a hospital’s request to stay discovery in part in a qui tam suit alleging that the hospital committed fraud in violation of the federal False Claims Act (FCA) by making claims for Medicaid funding through matching federal grants based upon the hospital’s “own non-bona-fide donations,” finding that discovery will be permitted only as to the initial disclosures required under Federal Rule of Civil Procedure 26(a)(1).
April 20, 2023
Denial Of Counsel Withdrawal Request Affirmed In Complex Insurance Fraud Cases

TRENTON, N.J. — A New Jersey appellate court on April 19 affirmed orders denying a law firm’s request to be relieved as defense counsel in cases consolidated on appeal related to claims filed by Allstate against chiropractors and their related individuals and entities alleging that they defrauded Allstate of millions of dollars through fraudulently issued insurance claims, finding that “the medical defendants would be materially prejudiced by” the firm’s withdrawal.
April 19, 2023
U.S. Supreme Court Hears Arguments In FCA Dispute Over Overcharging Medicare

WASHINGTON, D.C. — Whistleblowers in consolidated qui tam actions told the U.S. Supreme Court in April 18 oral arguments that the Seventh Circuit U.S. Court of Appeals erred in affirming judgments for 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) because the court failed to consider the relevance of the pharmacies’ subjective beliefs regarding whether they were overcharging the government programs.
April 17, 2023
Clinic Owner’s Reconsideration Bid Denied In Billing Fraud Row With State Farm

DETROIT — A Michigan federal judge on April 14 denied a motion for reconsideration or to amend filed by the owner of medical clinics alleged to have orchestrated a fraudulent no-fault billing scheme, finding that the owner “failed to show by clear and convincing evidence that the court was mistaken” regarding whether he fulfilled the requirement to obtain the governments’ consent to dismiss State Farm in a qui tam action against it.
April 17, 2023
Dismissal Issued In Class Suit Over No Insurance Payout Due To Misrepresentation

PHILADELPHIA — A Pennsylvania federal judge granted an insurer’s motion to dismiss a putative class action filed against it by life insurance beneficiaries after it denied their claims for benefits due to purported misrepresentations made in the insurance applications, finding that the court lacks both specific jurisdiction and venue.