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

Mealey's Insurance Fraud

October 02, 2024
Florida Federal Judge Tosses FCA Suit For ‘Unconstitutional’ Qui Tam Appointment

TAMPA, Fla. — Drawing on a dissent issued by U.S. Supreme Court Justice Clarence Thomas in United States ex rel. Jesse Polansky, M.D., M.P.H. v. Executive Health Resources, a Florida federal judge on Sept. 30 granted defendants’ dismissal motion in a qui tam suit alleging that medical providers and Medicare Advantage (MA) insurers violated the False Claims Act (FCA), finding that the relator lacks standing pursuant to Article II of the U.S. Constitution to pursue a qui tam action on the government’s behalf.
September 26, 2024
Claims Objection Bar Date Extension Sought In Liquidation Of Vesttoo

WILMINGTON, Del. — A Delaware federal bankruptcy judge has been asked to extend the claims objection bar date by 180 days in the Chapter 11 liquidation of Vesttoo Ltd. and its dozens of affiliates.
September 23, 2024
Panel Reverses, Says Insurer Failed To Show It Was Entitled To Rescind Policy

DETROIT — A Michigan appellate court reversed and remanded a lower court’s ruling that granted a no-fault insurer’s motion for summary disposition in a suit against it by its insured, seeking benefits related to an auto accident, finding that the insurer cannot show injury due to the insured’s misrepresentation in her policy application regarding household members absent evidence showing that without the misrepresentation, it would not have issued the policy or would have charged a higher premium.
September 23, 2024
Confidentiality Stipulation Filed In $300M Ponzi Fraud Case Involving Insurers

MIAMI — Plaintiffs and defendant Wells Fargo filed a confidentiality stipulation in a Florida federal court in a putative class action suit alleging that Wells Fargo aided and abetted fraud in a “massive” Ponzi scheme purportedly orchestrated by owners of insurers, some of whom are now in receivership, resulting in elderly investor victims losing more than $300 million after scheme operators sold them promissory notes secured by collateral in stranger-oriented life insurance policies (STOLIs).
September 20, 2024
Summary Judgment Granted To Insurer For ‘Legal Fraud’ In Insurance Application

TUCSON, Ariz. — An Arizona federal judge granted summary judgment to a homeowners insurer in its suit seeking to rescind its insured’s policy for material misrepresentation in the insurance application, finding that the insured’s misrepresentation that the property was his primary residence and failure to correct the policy’s terms representing this residency “constitute legal fraud,” thereby making rescission “proper.”
September 18, 2024
8th Circuit Affirms Dismissal Of FCA Suit Alleging Medicare Advantage Fraud

ST. LOUIS — The Eighth Circuit U.S. Court of Appeals affirmed a district court’s dismissal of a qui tam plaintiff’s suit asserting False Claims Act (FCA) violations against a marketing organization and health insurers related to their alleged falsification of insurance agent certifications required by the Centers for Medicare and Medicaid Services (CMS) and violations of Medicare Advantage marketing regulations, finding that the lower court did not err in dismissal because none of the marketing organization’s “alleged schemes are material to CMS’s” agreement with the insurers.
September 11, 2024
Magistrate Partially Grants Insured’s Motion To Compel Discovery In Yacht Damage Row

KANSAS CITY, Kan. — A Kansas federal magistrate judge on Sept. 10 granted, in part, a motion to compel discovery filed by an insured in a coverage dispute in which an insurer seeks a determination that a yacht that was damaged is excluded from coverage, finding in part, that because some of the discovery requests are overbroad, the court must limit them.
September 11, 2024
Dismissal Denied In Suit Seeking To Void Insurance Policies For Misrepresentation

SCRANTON, Pa. — A Pennsylvania federal judge denied a motion to dismiss filed by an insurance broker that said the judge should decline to exercise jurisdiction over the insurer’s suit seeking to rescind a policy and a declaration that its owes no duty to defend or indemnify the insured insurance broker in two underlying tort actions related to purported misrepresentations, finding that the absence of parallel state court proceedings and applicable case law factors weigh in favor of exercising jurisdiction over the case and that Pennsylvania law is “well-settled” regarding insurance policy rescission.
September 11, 2024
Judge Dismisses FCA Case Against Sanofi In Insulin Drug Medicaid Rebate Dispute

LOS ANGELES — A California federal judge granted dismissal to pharmaceutical company Sanofi in a qui tam suit filed against it by a former Medicaid provider alleging that Sanofi committed fraud in violation of the federal False Claims Act (FCA) and similar state laws by reporting false pricing information to the Centers for Medicare and Medicaid Services (CMS) regarding insulin marketed under the brand name “Admelog,” finding that the provider failed to plead the complaint with the appropriate scienter.
September 11, 2024
Insurer Dismisses Suit To Void Policy, Deny Coverage For Code Violation Fraud

LOS ANGELES — A commercial insurer, without explanation, dismissed without prejudice its suit against its insured limited liability company in a California federal court seeking rescission of the insured’s policy and a declaration that the insurer is not obligated to pay for fire damage to the property due to the insured’s alleged material misrepresentations in the policy application regarding the absence of safety code violations and liens on the property when an investigation revealed otherwise.
September 10, 2024
Magistrate Grants In Part Motions To Exclude Expert Testimony In FCA Kickback Suit

OAKLAND, Calif. — A California federal magistrate judge on Sept. 9 granted in part a health system’s motions to exclude expert testimony of relator’s witnesses in a qui tam suit alleging that the defendants violated the federal False Claims Act (FCA) and similar California law by paying kickbacks to certain physician groups, finding that certain portions of testimony should be excluded, including one witness’s opinion that a medical group was double billing.
September 09, 2024
Judge Grants Dismissal In Part In FCA Violation Suit Over COVID-19 Test Billing

NEWARK, N.J. — A New Jersey federal judge on Sept. 6 granted in part a motion to dismiss filed by a COVID-19 testing provider in a qui tam suit alleging False Claim Act (FCA) violations and violations of a similar New Jersey state law related to improper billing for COVID-19 tests, granting the motion because the provider is not an original source but denying it because the amended complaint satisfies the pleading standard and because “the claims are not barred by the” FCA limitations and are not unconstitutional.
September 06, 2024
5th Circuit Affirms Judgment For Insured In Bid To Void Workers’ Comp Policy

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals affirmed a lower court’s ruling granting summary judgment to an insured, a related party and an underwriter in a workers’ compensation insurer’s negligence, breach of fiduciary duty and declaratory judgment suit seeking to rescind its insured’s policy, finding that the district court did not err in granting summary judgment, in part, because the insurer failed to show that the underwriter breached any duties to the insurer.
September 05, 2024
Life Insurer Seeks To Void $1.5M Policy For Memory Issue Misrepresentations

NEW ORLEANS — A Pennsylvania-based life insurer filed a declaratory judgment suit in a Louisiana federal court against the beneficiary of a $1.5 million life insurance policy issued on the life of a decedent, seeking to void the policy due to multiple misrepresentations the decedent allegedly made in the policy application regarding memory and psychological issues and related treatment.
September 04, 2024
Magistrate Grants Motion To Compel Discovery In Medicare Advantage Fraud Dispute

TAMPA, Fla. — A Florida federal magistrate judge on Sept. 3 granted a relator’s motion to compel discovery from medical providers and affiliated providers in a suit alleging that the medical providers and Medicare Advantage (MA) insurers violated the False Claims Act (FCA), finding that “while there do appear to be differences between employed and affiliated providers, the Court does not find these differences to be relevant or significant enough to exclude affiliated providers from discovery.”
September 04, 2024
Partial Summary Judgment Granted For Providers In Whistleblower FCA Suit

WILLIAMSPORT, Pa. — A Pennsylvania federal judge granted in part summary judgment in a suit alleging that a hospital and a federally qualified health center (FQHC) violated the federal False Claims Act (FCA) by unlawfully retaliating against a physician by terminating him after he alleged FCA violations, finding that summary judgment is appropriate for the retaliation and the whistleblower claims because there is a lack of evidence showing that the purpose of the alleged whistleblowing was to support the FQHC’s independence from the hospital.
August 30, 2024
Bank Faces Another Negligence, Fraud Suit In Connection With Vesttoo Collapse

NEW YORK — Asserting fraud and negligence claims against China Construction Bank Corp. (CCBC) and related entities, a company affected by the collapse of Vesttoo Ltd. filed suit in New York state court for damages that it says include at least $140 million in cedent premium payments that went into designated segregated accounts.
August 29, 2024
Judgment Denied In Travelers’ Suit Seeking To Rescind Insured Contractor’s Policy

WHITE PLAINS, N.Y. — A New York federal judge denied a motion for summary judgment by Travelers Casualty Insurance Co. in its suit seeking a declaratory judgment to rescind a general liability and property policy issued to a general contractor, finding though Travelers showed that the contractor made misrepresentations in the policy application regarding performing ineligible operations, Travelers failed to establish that those misrepresentations were material.
August 29, 2024
After $90M Settlement Reached, Judge Dismisses FCA Suit Alleging False CMS Bids

LOUISVILLE, Ky. — After being notified that Humana Inc. agreed to pay $90 million to settle a case against it, a Kentucky federal judge dismissed the case, which accused Humana of violating the False Claims Act (FCA) by receiving overpayments after it knowingly submitted false bids to the Centers for Medicare and Medicaid Services (CMS).
August 28, 2024
Dispute Over FCA Public Disclosure Bar Distributed For Conference In Supreme Court

WASHINGTON, D.C. — The U.S. Supreme Court on Aug. 28 distributed for conference a petition for certiorari filed by pharmaceutical companies seeking review of the Ninth Circuit U.S. Court of Appeals’ ruling that the public disclosure bar was not triggered in a case where it reversed a district court’s dismissal of a suit accusing the companies of violating the False Claims Act (FCA) by artificially inflating drug prices.
August 28, 2024
Life Insurer Seeks Rescission Of $1M Life Policy Over Health Misrepresentation

CAMDEN, N.J. — A life insurance and annuity company sued the beneficiary of a $1 million life insurance policy in a New Jersey federal court, seeking to rescind the policy for purported misrepresentations in the policy application regarding the insured’s health history, asserting that had the insurer known about the insured’s health history, it would not have issued the policy.
August 26, 2024
Insurer’s Reconsideration Bid Denied In $3.8M Murdaugh Housekeeper Settlement Row

CHARLESTON, S.C. — A South Carolina federal judge denied an insurer’s motion for reconsideration of a ruling denying summary judgment to the insurer in its suit seeking a declaration that it is entitled to recover the $3.8 million it paid to settle a claim brought by the estate of Alex Murdaugh’s former housekeeper, which the estate never received due to the purported fraud of Murdaugh and his alleged conspirators, finding that the insurer failed to show any changes in law or new evidence to justify reconsideration.
August 23, 2024
Disability Insurer Seeks Policy Rescission For Health History Misrepresentations

RALEIGH, N.C. — A life and disability income insurer sued its insured in a North Carolina federal court, seeking rescission of an individual disability policy issued to the insured based on her purported material misrepresentations regarding her failure to disclose her complete health history.
August 23, 2024
7th Circuit Affirms Judgment For Insurer In Dispute Over Rescinded Policies

CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a district court’s ruling granting summary judgment to a reinsurer seeking to rescind policies issued to a waste collection company for the company’s purported misrepresentations in policy applications regarding failure to disclose a dispute over misuse of the company name, finding that the misrepresentations were material and therefore supported rescission of the policies.
August 19, 2024
Pharma Supplier: High Court Should Deny Cert In FCA, Anti-Kickback Violations Row

WASHINGTON, D.C. — A pharmaceutical wholesaler and related entities argue in their Aug. 16 U.S. Supreme Court brief that the court should not grant certiorari to review the Second Circuit U.S. Court of Appeals ruling affirming a district court’s dismissal of federal False Claims Act (FCA) suit alleging violations of the Anti-Kickback Statute (AKS), asserting the Second Circuit correctly held that the AKS is violated only when a defendant knows their conduct was unlawful.