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

Mealey's Insurance Fraud

March 13, 2023
United States Seeks Reconsideration Of Libby, Mont., Asbestos Deposition Ruling

MISSOULA, Mont. — The United States has asked for leave to file a motion for reconsideration, telling a federal judge in Montana that having two agencies appear for deposition in a dispute over fraud claims stemming from asbestos-related Medicare claims related to Libby, Mont., would require marshalling numerous individuals from several different agencies and asking them to duplicate already performed work without any likelihood of producing relevant evidence.
March 08, 2023
Judgment Granted For Insurer, Voiding Policy For Coverage In Underlying Suits

DETROIT — A Michigan federal judge granted an insurer’s motion for summary judgment in its suit seeking to enforce rescission of an auto insurance policy voided in another declaratory judgment suit as to a child care center’s insured vehicle involved in an accident, finding that the policy does not provide coverage for those entities suing the insurer in underlying state court suits and seeking reimbursement for purported medical services provided under an assignment of rights.
March 08, 2023
Judge Seeks Remaining Issues After $43M Verdict Against Eyecare Firm In FCA Suit

ST. PAUL, Minn. — A Minnesota federal judge entered a text order directing parties to raise any remaining issues before entry of judgment after a six-week trial concluded with a jury returning a verdict of more than $43 million 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.
March 07, 2023
Dismissal Recommended In Glucose Monitor FCA Suit Alleging Doctor Kickbacks

SAN ANTONIO — A Texas federal magistrate issued a report and recommendation advising dismissal of a former employee’s qui tam suit brought under the federal False Claims Act (FCA) and Texas Medicaid Fraud Prevention Act (TMFPA) against a company selling continuous glucose monitoring systems, finding that the employee’s amended complaint does not sufficiently allege the company’s involvement in a fraudulent scheme to submit claims to federal health care insurers “based on illegal kickbacks.”
March 03, 2023
Calif. Federal Judge: Insurer Can Rescind Policy In Light Of Misrepresentations

SAN FRANCISCO — An insurer is entitled to rescind a policy covering an apartment building because the owner of the apartment building made misrepresentations about its recent litigation history in its application, a California federal judge found in entering judgment for the insurer on its counterclaims and third-party claims while also dismissing the claims against it by another insurer that sought declaratory and equitable relief for the defense and indemnity of the owner in four lawsuits.
March 03, 2023
Judgment Entered After Jury Awards Insurer $2.4M In Employee Status Fraud Suit

SANTA ANA, Calif. — A California federal judge issued a final judgment after a jury found that an employer and his California limited liability company committed fraud when the employer misrepresented his nonagenarian father as an employee insured under the company’s group health plan and awarded the insurer more than $2.4 million in damages.
March 02, 2023
Panel Reverses, Says Including Time Under Seal Wrong In Calif. False Claims Suit

LOS ANGELES — A California appellate court reversed and remanded a trial court’s dismissal of a qui tam medical insurance fraud suit filed against a chiropractor and related entities, finding that dismissal under a rule requiring a suit to go to trial within five years after filing was incorrect because the trial court failed to exclude from the five-year calculation the time under seal and stays due to alternate criminal proceedings against some of the defendants.
March 01, 2023
Amendment And Dismissal Fought After Jurisdictional Discovery In Fraud Suit

WILMINGTON, Del. — Opposing recent motions in a case concerning an alleged scheme to transfer funds from a reinsurance trust to affiliated entities and “highly volatile hedge funds,” the plaintiffs tell a Delaware Chancery Court that the case should not be dismissed for failure to prosecute and certain defendants argue in part that a bid to file a fourth amended complaint “is procedurally improper, untimely, and futile.”
March 01, 2023
DOJ, New York Settle Medicaid Fraud Claims Against Nursing Home For $7.1M

NEW YORK — A New York nursing home, its owners and operators and landlord entered into a settlement with the U.S. Department of Justice and New York, agreeing to pay in total $7,168,000 to resolve allegations that they violated the False Claims Act (FCA) by submitting false claims to the Medicaid program for services not provided to residents.
February 28, 2023
Judge Denies Texas Doctor’s Dismissal Motion In RICO Insurance Fraud Suit

SAN ANTONIO — A Texas federal judge denied a physician’s dismissal motion in a Racketeer Influenced and Corrupt Organizations Act (RICO) fraud suit filed against him by insurers alleging that he submitted fraudulent medical bills inflating the severity of patients’ injuries for medically unnecessary injections, finding that the insurers alleged facts to link the physician’s purported fraudulent conduct to the insurers’ purported harm and have shown that the money the insurers paid for “alleged artificially inflated claims” belongs to them.
February 28, 2023
Sen. Grassley Urges High Court Reversal Of 7th Circuit In FCA Medicare Drug Cases

WASHINGTON, D.C. — Sen. Charles Grassley filed an amicus curiae brief in support of whistleblower qui tam petitioners asking the U.S. Supreme Court to overturn the Seventh Circuit U.S. Court of Appeals’ decisions affirming judgments for pharmacies in consolidated cases alleging that the pharmacies were fraudulently overcharging Medicare, Medicaid and the Federal Employee Health Benefits Program (FEP) for prescription drugs.
February 28, 2023
Supreme Court Hears Arguments About Federal Identity Theft Statute

WASHINGTON, D.C. — In oral arguments Feb. 28, the U.S. Supreme Court justices raised questions and concerns about vagueness, due process and interpretation as they examined the federal aggravated identity theft statute in the context of a psychologist convicted of health care fraud, with some of the justices opining that the statute broadly encompasses actions that would not typically be considered identity theft.
February 27, 2023
Grand Jury Indicts Owner Of N.C. Insurance Cos. Over Alleged Fraud Scheme

CHARLOTTE, N.C. — Alleging a fraud scheme in effect “at least” from roughly 2016 through 2019, the U.S. Department of Justice on Feb. 24 announced a grand jury indictment filed the previous day in North Carolina federal court against an individual who controlled multiple insurance companies, Greg E. Lindberg.
February 27, 2023
Health Care Fraud Defendant Seeks Lower Sentence After Doctor’s New Trial Denial

BIRMINGHAM, Ala. — After an Alabama federal judge denied a physician and his wife’s motions for a new trial following their convictions related to their involvement in an illegal controlled substance distribution and health care fraud scheme, one of their co-defendants, who pleaded guilty to conspiracy to commit health care fraud, moved Feb. 24 for a reduced sentence, asserting that an 18-month sentence is sufficient and “proportional to the degree of her involvement in and formulation of the scheme.”
February 24, 2023
Settlement Reached In Yacht Coverage Row Involving Captains’ Alleged Convictions

MIAMI — After parties filed a joint notice of settlement, a Florida federal judge issued an order closing an insurer’s suit seeking a determination that it owes no coverage to a yacht charter company in a separate state court action because the insurance policy issued to the company is void, in part, due to the company’s omission in its insurance application of two of the captains’ alleged criminal convictions.
February 24, 2023
Government Must Testify In Medicare-Asbestos Fraud Case, Judge Says

MISSOULA, Mont. — A federal judge in Montana granted a joint motion to compel trial testimony from two government entities on possibly fraudulent Medicare claims stemming from Libby, Mont., asbestos exposures, saying that they alone possessed the information and that the evidence was material to the case.
February 22, 2023
Judge Rules On Pain Clinic’s Dismissal Motion In GEICO’s No-Fault Fraud Suit

NEWARK, N.J. — A New Jersey federal judge granted in part a pain relief center and its affiliated physician’s dismissal motion in a suit filed against them related to purported fraudulent claims for medical expenses reimbursement under no-fault laws, finding that because claims under New Jersey’s Insurance Fraud Prevention Act (IFPA) “are not subject to arbitration under the No-Fault Laws,” the court retains jurisdiction over the IFPA claim, but an arbitrator will decide whether the defendants “violated RICO, committed common law fraud, or are liable for unjust enrichment.”
February 21, 2023
N.J. High Court Remands For New Trial To Allocate Fault In Insurance Fraud Suit

TRENTON, N.J. — The New Jersey Supreme Court reversed and remanded, in part, an appellate court’s determination that a new trial is needed on all issues in insurers’ fraud suit against construction companies and their officers and directors, finding that because the trial court erred by not applying provisions of the state Comparative Negligence Act (CNA), a new trial is warranted only on the issue of apportioning “percentages of fault under the CNA but not to the issue of compensatory damages” or liability.
February 16, 2023
Delaware Judge Rules On Fraud Claims In Row Over STOLI Policies

WILMINGTON, Del. — A Delaware judge granted in part a life insurer’s summary judgment motion in suits consolidated for trial that were filed against a life insurance policy administrator and its beneficial owner seeking a declaration that the two $5 million life insurance policies, one in each original suit, are void ab initio because they are stranger-originated life insurance (STOLI) policies, finding the policies statutorily void ab initio because they were paid for with nonrecourse funds and neither insured paid any of the premiums.
February 16, 2023
Federal Judge Affirms Orders As ‘Not Contrary To Law’ In FCA Medicare Fraud Suit

NEW YORK — A New York federal judge affirmed a magistrate judge’s orders excluding evidence and partially denying a relator’s motion to amend the complaint for the seventh time in a qui tam suit filed under federal and New York state False Claims Acts alleging that health systems defrauded the federal and state governments by submitting millions of dollars of false claims to Medicare and Medicaid for home health services, finding that the magistrate judge’s rulings in the nondispositive matters were not “clearly erroneous or contrary to law.”
February 16, 2023
Federal Judge Rules On Qui Tam FCA Suit Against Behavioral Health Provider

ALBUQUERQUE, N.M. — A New Mexico federal judge granted in part insurers’ motion to dismiss a qui tam suit filed against them under federal and state false claims act statutes regarding the insurers’ alleged false representations in their bid to administer state behavioral health services, finding that the false representation claims are statutorily time-barred and that the relator failed to provide evidence to support a state law Medicaid fraud claim.
February 14, 2023
Amendment And Dismissal Sought After Jurisdictional Discovery In Fraud Suit

WILMINGTON, Del. — Following a Delaware Chancery Court directive for a status update in a case concerning an alleged scheme to transfer funds from a reinsurance trust to affiliated entities and “highly volatile hedge funds,” the plaintiffs moved for leave to file a fourth amended complaint, and certain defendants moved to dismiss for failure to prosecute.
February 13, 2023
Dental Supplier Pays $100,000 To Settle False Claims Of Conflicted Sales Reps

BOSTON — Dental products seller OraPharma Inc. has agreed to pay $100,000 to settle false claims allegations that its sales account managers moonlighted as dental hygienists and pushed the use of an antibiotic, resulting in the filing of false claims to Medicare.
February 07, 2023
11th Circuit Tosses GEICO’s Appeal In Fraud Suit, Cites Lack Of Jurisdiction

ATLANTA — The 11th Circuit U.S. Court of Appeals on Feb. 6 dismissed GEICO’s appeal of a district court’s order granting summary judgment to a windshield repair shop and its owners, in a suit alleging that the 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 11th Circuit lacks jurisdiction because there is no final appealable decision.
February 02, 2023
2nd Circuit Issues Stipulation Order In Companies Appeal Of Insurers’ RICO Suit

NEW YORK — The Second Circuit U.S. Court of Appeals issued its fifth stipulation order pursuant to a local rule for dismissal without prejudice, withdrawing the case for stipulating parties to explore settlement through mediation in an appeal of a lower court order denying medical companies’ motion to dismiss no-fault insurers’ fraudulent billing suit against them.