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

Mealey's Insurance Fraud

November 12, 2024
Group Outlines Dismissal Arguments In Another Reinsurer’s RICO Lawsuit

BROOKLYN, N.Y. — As it has done in a similar Racketeer Influenced and Corrupt Organizations (RICO) Act suit that a different reinsurer filed in New York federal court over purportedly fraudulent workers’ compensation claims and personal injury lawsuits, a group of defendants filed a pre-motion letter outlining plans to seek dismissal.
November 06, 2024
Insurer And Beneficiary Of $1.5M Policy Settle Suit Over Memory Misrepresentations

NEW ORLEANS — A Pennsylvania-based life insurer filed a notice advising a Louisiana federal court of a settlement in the insurer’s declaratory judgment suit against the beneficiary of a $1.5 million life insurance policy, seeking to void the policy due to multiple misrepresentations the decedent allegedly made in the policy application regarding memory and psychological issues.
November 06, 2024
Physician’s Suit Against GEICO Tossed For Failure To Allege ‘Protected Right’

BROOKLYN, N.Y. — A New York federal judge dismissed a suit filed by a physician and his medical practice against GEICO, alleging that it violated a New York civil rights law by interfering with the plaintiffs’ rights to provide lawful medical care, finding that GEICO’s underlying litigation against the physician and his practice alleging Racketeer Influenced and Corrupt Organizations Act (RICO) violations related to fraudulent billing does not constitute a claim for “unlawful interference with medical care.”
November 06, 2024
Jury Awards Cigna $7.25M In Suit Over Fraudulent Billing For Drug Testing

NEW HAVEN, Conn. — A Connecticut federal court jury has awarded Cigna Health and Life Insurance Co. $7,256,100.60 in damages in a suit alleging that Florida drug testing labs were unjustly enriched by submitting to Cigna claims for reimbursement for medically unnecessary urine drug testing, resulting in purported overpayments to the labs of more than $20 million.
November 05, 2024
DOJ Files Appearance In 11th Circuit Appeal Of FCA Unconstitutionality Ruling

ATLANTA — The U.S. Department of Justice (DOJ) on Nov. 4 in the 11th Circuit U.S. Court of Appeals filed lead counsel’s notice of appearance in an appeal by the U.S. government and a relator who filed a qui tam action on behalf of the government, seeking review of a district court’s ruling that dismissed for lack of standing under Article II of the U.S. Constitution the relator’s suit alleging that medical providers and Medicare Advantage (MA) insurers violated the federal False Claims Act (FCA).
November 04, 2024
Judgment Granted For State Farm In No-Fault Fraud Suit Involving Chiropractors

NEW YORK — A New York state justice granted summary judgment to State Farm in its suit seeking a judgment that it has no duty to pay for no-fault claims related to an auto accident where its insured driver and passengers purportedly sustained injuries and sought treatment from chiropractors and other medical providers, finding that the claimants’ failure to appear for an examination under oath (EUO) “voided the policy ab initio.”
November 04, 2024
New Jersey Panel Affirms Judgment For Insurer In Row Over $1M Auto Rental Coverage

TRENTON, N.J. — A New Jersey appellate court on Nov. 1 affirmed a lower court ruling granting summary judgment to an insurer and rescinding for material misrepresentation a $1 million nonowned auto liability policy issued to a business operating a summer camp, finding that the lower court correctly determined that there was no ambiguity in a question in the policy application where the insured answered in the negative regarding renting vehicles but actually rented vans that were not covered under the policy.
November 01, 2024
Insurer Seeks Policy Voidance, Declaration Of No Duty To Defend In Underlying Suit

CHEYENNE, Wyo. — A commercial insurer on Oct. 31 sued its insured trucking company and the company’s purported owners in a Wyoming federal court, seeking a declaration that the policy issued to the insured is void due to alleged material misrepresentations regarding ownership of the company and there is no duty to defend or indemnify the company in an underlying suit.
October 30, 2024
Judgment Granted For Liberty Mutual In No-Fault Dispute Over Misrepresentation

NEW YORK — A New York state justice granted summary judgment to Liberty Mutual in its declaratory judgment suit against medical providers and an insurance claimant who was injured in an auto accident and sought coverage pursuant to a policy issued to her mother, finding that Liberty Mutual is entitled to summary judgment due to the insured’s misrepresentation in the policy application that she was the only driver of the insured vehicle.
October 29, 2024
Quash Motion Denied In RICO Suit Over Fraudulent No-Fault Claims Totaling Millions

BROOKLYN, N.Y. — A New York federal magistrate judge on Oct. 28 denied a nonparty’s motion to quash a subpoena seeking production of documents related to his bank accounts in a Racketeer Influenced and Corrupt Organizations Act (RICO) suit alleging that the defendant medical providers and physicians participated in a multimillion-dollar fraudulent scheme to bill the plaintiff insurer for medically unnecessary services, finding “that the request is not overly broad but appropriately tailored to information relating to people and entities allegedly involved in the scheme.”
October 29, 2024
Connecticut Judge Awards $39.2M To State In Fraud, Kickback Suit Against Pharmacy

HARTFORD, Conn. — A Connecticut state court judge awarded the state of Connecticut $39,254,239.20 in damages and penalties in a suit against Florida-based Assured Rx LLC and its former owner and operator asserting claims pursuant to the Connecticut False Claims Act related to the defendants’ alleged kickback scheme that involved paying customers to obtain prescriptions for compound drugs made and distributed by Assured, finding that Assured knowingly caused the submission of false claims for reimbursement to a state insurance plan.
October 28, 2024
Motion To Quash Denied In $3M STOLI Policy Row Involving Insurer And Intermediary

CINCINNATI — A federal magistrate judge on Oct. 25 denied a retired life insurance company employee’s motion to quash a subpoena in a special action filed in Ohio federal court related to litigation in a Delaware federal court where a life insurer sued a securities intermediary seeking a declaratory judgment that a policy owned by the securities intermediary is void ab initio as a stranger originated life insurance (STOLI) policy, finding that the insurer and employee failed to show that deposing the employee “would impose an undue burden or is not proportional to the needs of the case.”
October 25, 2024
11th Circuit Affirms $690K Judgment For GEICO In No-Fault Suit Over Improper Billing

ATLANTA — The 11th Circuit U.S. Court of Appeals on Oct. 24 affirmed a district court’s $690,251.44 judgment for GEICO in its suit against a health care clinic and related parties for allegedly submitting fraudulent no-fault insurance charges, finding that the appellants failed to show that the District Court committed “reversable error” in its determination that the appellants “submitted requests for reimbursement for non-reimbursable services.”
October 22, 2024
Lincoln National Seeks To Void $500K Life Policy For Health Misrepresentations

ATLANTA — The Lincoln National Life Insurance Co. on Oct. 21 filed a complaint against the personal representative for the estate of its insured, seeking a declaratory judgment that the decedent’s $500,000 life insurance policy is void ab initio due to the insured’s purported material misrepresentation regarding his cancer diagnosis.
October 22, 2024
Illinois Panel Partly Reverses Ruling In Coverage Dispute Over Dog Attack

SPRINGFIELD, Ill. — An Illinois appeals panel reversed a lower court’s grant of summary judgment in favor of defendants in a homeowners insurer’s declaratory judgment lawsuit disputing coverage for bodily injury caused by a dog attack, finding that there is a genuine issue of material fact regarding whether the insured misrepresented her ownership of a pit bull.
October 17, 2024
11th Circuit Affirms Judgment For Repair Shop In GEICO Repair Act Fraud Suit

ATLANTA — After the Florida Supreme Court answered in the negative questions regarding whether violations under the Florida Motor Vehicle Repair Act, including failure to provide a written estimate, preclude a repair shop from receiving payment from an insurance company, the 11th Circuit U.S. Court of Appeals affirmed a district court’s judgment dismissing a claim and granting summary judgment to the repair shop on the remaining claims, partially due to GEICO’s concession that the complaint fails upon a judicial determination that “alleged Repair Act violations do not void the repair invoice.”
October 15, 2024
U.S. High Court Declines To Review 7th Circuit’s Ruling Affirming FCA Liability

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 15 denied a petition for a writ of certiorari filed by a business owner and his three health care companies seeking review of a Seventh Circuit U.S. Court of Appeals ruling affirming a district court’s judgment finding the owner and his companies liable for violating the False Claims Act (FCA) and Anti-Kickback Statute (AKS) for fraudulent Medicare billing.
October 15, 2024
Judgment Entered In Favor Of Insured In Coverage Dispute Over Fireworks Explosion

BISMARCK, N.D.— A federal court in North Dakota entered a judgment in favor of an insured in a homeowners insurer’s declaratory judgment lawsuit disputing coverage for underlying property damage and personal injuries caused by a fireworks explosion after finding that the policy’s misrepresentation provision does not bar coverage because the insured did not willfully conceal or misrepresent any material facts regarding his use and storage of commercial fireworks at his Bismark property.
October 14, 2024
Judgment Granted For Vehicle Insurer In Fraud Suit Over Driver Misrepresentation

RIVERSIDE, Calif. — A California federal judge granted summary judgment to a motor carrier insurer in its suit seeking a determination that it is entitled to rescind its insured’s policy due to the insured’s material misrepresentation in his policy application where he omitted listing as a driver his employee who was killed in a motor vehicle accident while driving one of the insured’s vehicles.
October 14, 2024
Intervention Denied In Coverage Row Over Yacht Deemed ‘Remnant Of Its Former Self’

SAN JUAN, Puerto Rico — A Puerto Rico federal judge denied intervention in a declaratory judgment suit against an insured by parties whose boats were purportedly harmed by fire that spread from a nearby yacht the judge called a “charred remnant of its former self,” finding that the proposed intervenors failed to establish that their interests “are not adequately represented by the defendant.”
October 10, 2024
Standing, Adequacy Of RICO Allegations Disputed In Reinsurer’s Lawsuit

BROOKLYN, N.Y. — A New York federal judge has dismissed a Racketeer Influenced and Corrupt Organizations (RICO) Act lawsuit without prejudice against more than a dozen defendants that a reinsurer alleged took part in purportedly fraudulent workers’ compensation claims and personal injury lawsuits.
October 10, 2024
Claims Objection Bar Date Extension Granted In Liquidation Of Vesttoo

WILMINGTON, Del. — A Delaware federal bankruptcy judge has granted a motion to extend the claims objection bar date by 180 days to April 7 in the Chapter 11 liquidation of Vesttoo Ltd. and its dozens of affiliates.
October 10, 2024
Bar Seeks 8th Circuit Reversal In Fire Damage Coverage Row, Cites Scope Of Actions

MINNEAPOLIS — A corporation operating a bar and the former spouse of the bar’s prior owner, who pleaded guilty to arson for the fire that destroyed the bar, filed a reply brief in the Eighth Circuit U.S. Court of Appeals urging the court to reverse a district court’s grant of summary judgment to the bar’s insurer upon finding that the arsonist’s false statements to defraud the insurer were imputed to the bar.
October 09, 2024
Judge Rules On Report And Recommendation In FCA Nursing Home Staffing Dispute

PHILADELPHIA — A Pennsylvania federal judge adopted in part a special master’s report and recommendation in a relator’s qui tam suit against Kindred Healthcare Inc. and its subsidiaries, alleging that they misrepresented their compliance with staffing requirements to receive larger reimbursements from Medicare and Medicaid, overruling the relator’s objections to the recommendation that discovery be limited to medical records related to providing services regarding activities of daily living.
October 08, 2024
Complaint Unsealed In FCA Suit Accusing Assisted Living Provider Of Medicaid Fraud

NEW YORK — A New York federal judge unsealed a qui tam complaint filed by a relator asserting that a New York state assisted living provider violated the federal False Claims Act (FCA) and similar New York state law and defrauded Medicaid by falsely inflating residents’ level of care scores to increase per diem Medicaid capitated billing rates.