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

Mealey's Insurance Fraud

December 19, 2023
Health Care Tech Company Settles FCA Claims Over Heart Monitoring Fraud For $14.7M

WASHINGTON, D.C. — The U.S. Department of Justice (DOJ) on Dec. 18 announced that BioTelemetry Inc. and its subsidiary LifeWatch Services Inc. have agreed to pay more than $14.7 million to resolve claims that they violated the federal False Claims Act (FCA) by knowingly submitting claims to government insurers for a higher level of remote cardiac monitoring than intended by physicians or that was medically necessary, resulting in higher reimbursements to LifeWatch.
December 19, 2023
Judge Tosses FCA Medicare Fraud Suit Against Hospitals, Cites Lack Of Details

NEWARK, N.J. — A New Jersey federal judge dismissed a qui tam suit alleging that multiple hospitals violated the federal False Claims Act (FCA) and New Jersey law by automatically coding certain procedures for Medicare recipients for in-patient stays without using a case-by-case review, finding, in part, that the complaint fails to allege the “particular details of the scheme.”
December 19, 2023
Unsecured Creditors Update Proposed Liquidation Plan In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — The Official Committee of Unsecured Creditors on Dec. 18 filed an amended proposed combined disclosure statement and Chapter 11 plan of liquidation for the jointly administered cases of Vesttoo Ltd. and 48 affiliates in Delaware federal bankruptcy court.
December 14, 2023
Default Judgment Recommended In Insurance Coverage Row Over Personal Injury Suit

BROOKLYN, N.Y. — A New York federal magistrate judge recommended granting default judgment to a commercial liability insurer, finding that default judgment should be granted because the insurer “is not obligated to defend or indemnify” in the underlying personal injury action due to the insured’s material misrepresentations in its policy application.
December 14, 2023
Israeli Law Raised In Feedback On Liquidation Plan For Vesttoo And Its Affiliates

WILMINGTON, Del. — In two Dec. 13 filings citing Israeli law and other issues, Vesttoo Ltd. and its affiliated debtors and a venture capital organization and individual that report significant related interests urge a Delaware federal bankruptcy court not to approve a Chapter 11 plan of liquidation and related arrangements as currently proposed.
December 13, 2023
Insurers Accuse Aon Of Negligence, Other Claims In Suit Over Vesttoo Dealings

NEW YORK — A group of four insurers has sued Aon PLC (Aon) and Aon Insurance Managers (Bermuda) Ltd. in New York state court, asserting eight claims including constructive fraud and negligence in connection with the events that preceded the bankruptcy of Vesttoo Ltd.
December 12, 2023
Magistrate Grants Motion To Compel In Bad Faith Suit Over $4M STOLI Policy

LINCOLN, Neb. — A Nebraska federal magistrate judge granted an insurer’s motion to compel the production of documents in a breach of contract and bad faith suit filed against the insurer by Wells Fargo Bank, the securities intermediary for an account holder of a purported stranger originated life insurance (STOLI) policy, finding that even if the insurer’s “conduct was inequitable,” the insurer is “entitled to discover evidence of” purported “inequitable conduct” by Wells Fargo.
December 11, 2023
High Court Denies Cert To Care Home Owner Subject To $38M Fraud Forfeiture Order

WASHINGTON, D.C. — The U.S. Supreme Court on Dec. 11 denied certiorari to a man arguing that the 11th Circuit U.S. Court of Appeals erred in rejecting his argument that he had a right to a jury determination regarding his $38.7 million forfeiture order related to his fraud, bribery and money laundering convictions in a health care scheme involving bribing physicians to have patients entered into assisted living and skilled nursing facilities he owned.
December 07, 2023
Texas Physicians, Hospital CFO Settle FCA Suit Over Illegal Kickbacks For $880,000

SHERMAN, Texas — The U.S. Department of Justice (DOJ) announced that a hospital’s former chief financial officer (CFO) and several physicians agreed to pay the U.S. government a total of $880,199 to settle a qui tam federal False Claims Act (FCA) suit alleging violations of the Anti-Kickback Statute (AKS) through payment of illegal kickbacks to doctors and medical practices and fraud against government insurers by billing them for medically unnecessary tests.
December 06, 2023
Judge Dismisses FCA Complaint Alleging Medicare Fraud Against Maker Of COPD Drug

MINNEAPOLIS — A Minnesota federal judge dismissed a complaint filed by a pharmacist alleging that the pharmaceutical company that manufactures chronic obstructive pulmonary disease (COPD) drug Brovana violated the federal False Claims Act (FCA) by issuing rebates to pharmacies in prohibition of the Anti-Kickback Statute (AKS) and submitting fraudulent claims for reimbursement to Medicare, finding that the AKS-related claims lack a causal connection and therefore are dismissed with prejudice but that the complaint is dismissed without prejudice for failure to plead the claims with particularity.
December 06, 2023
Motion To Quash Subpoena For Bank Records Denied In GEICO’s RICO Violations Suit

BROOKLYN, N.Y. — In a docket-only order, a magistrate judge on Dec. 5 denied a motion to quash a subpoena for bank records in GEICO’s suit alleging that psychology and billing practices, their related psychologists and people who control them violated the Racketeer Influenced and Corrupt Organizations Act (RICO) through their participation in a fraudulent scheme to provide kickbacks for referrals and submit for reimbursement claims for services that did not occur or were not medically necessary.
December 06, 2023
GEICO Seeks Default In $1.8M PIP Fraud Suit Against Doctors, Pain Clinic

NEWARK, N.J. — GEICO on Dec. 5 moved for a clerk’s entry of default in a New Jersey federal court after a doctor and his medical practice failed to respond to GEICO’s complaint alleging that they participated in a “complex fraudulent scheme” with other medical practitioners and a pain management practice to submit fraudulent personal injury protection (PIP) billing to GEICO for services that were not performed or not medically necessary, resulting in damages to GEICO of more than $1.8 million.
December 05, 2023
Insurer Granted Default Judgment In Row With Car Renter Who Lied About Coverage

LAS VEGAS — A Nevada federal judge granted default judgment to an auto insurer for a rental car company in its suit against a woman who rented a car from the company, her unauthorized driver and the person whose car he hit, finding that default judgment “is warranted” for a breach of condition precedent claim but that claims for misrepresentation, unauthorized use of a rental car and declaratory relief limiting recovery are dismissed.
December 04, 2023
Judge Allows Insurers To Amend To Add Fraud Defense For Pre-Hurricane Damage

NEW YORK — A New York federal judge on Dec. 1 issued an order granting a motion to amend an answer in a breach of contract suit filed against a commercial property insurer and an insurance syndicate over their failure to cover a condominium’s hurricane-related losses, finding that the proposed fraud defenses were sufficiently pleaded after discovery revealed that the alleged hurricane-related damage purportedly occurred before the hurricane.
December 04, 2023
Michigan Panel Affirms Order Granting Judgment To Auto Insurer In No-Fault Dispute

DETROIT — A Michigan appeals court affirmed a lower court’s ruling granting summary disposition to an auto insurer in a woman’s suit seeking no-fault benefits from the insurer, finding that the lower court did not err when granting summary disposition to the insurer due to the false statements the woman made on her application for no-fault benefits.
November 30, 2023
Judge Rules On Discovery Request In FCA Suit Alleging Medicare Advantage Fraud

TAMPA, Fla. — A Florida federal judge on Nov. 29 granted in part a relator’s motion to compel discovery in a qui tam suit brought on behalf of the federal government, alleging that medical providers and Medicare Advantage (MA) insurers violated the federal False Claims Act (FCA) by conspiring together to increase risk adjustment scores of MA patients to obtain more federal funding than was owed, finding that because the fraud examples provided in the complaint do not show a purported scheme from 2014 continuing after 2020, discovery is limited to ending on the last day of 2020.
November 30, 2023
Judge Refuses To Reconsider Ruling Allowing Law Firm To Intervene In D&O Dispute

SAN JOSE, Calif. — A federal judge in California refused to reconsider its Nov. 3 ruling that granted a law firm’s motion to intervene in an insurer’s lawsuit seeking a declaration that a directors and officers employment practices liability and fiduciary liability policy is rescinded because of the insureds’ material misrepresentations, standing by its decision to permit the firm to enforce a charging lien against the proceeds of the policy.
November 29, 2023
Judge Dismisses FCA Claim In Whistleblower Suit Against Medicare Plan Seller

ALLENTOWN, Pa. — A Pennsylvania federal judge dismissed in part a former employee’s suit claiming wrongful termination in violation of the federal False Claims Act (FCA), the Pennsylvania Whistleblower Law (PWL) and common-law wrongful discharge, finding that while the former employee “failed to plead any underlying FCA violation” against his former employer, a company selling Medicare plans, his claims for violations of the PWL and common-law wrongful discharge were sufficiently pleaded and are therefore not dismissed.
November 29, 2023
Judge Denies Hospital’s Dismissal Motion In FCA Suit Over COVID Testing Scheme

CHICAGO — An Illinois federal judge denied dismissal motions filed by a hospital, the administrator of its lab and the lab’s medical director and affiliated company in a relator’s qui tam suit alleging that they violated the federal False Claims Act (FCA) and Illinois state laws by submitting for reimbursement to government insurers claims for unnecessary testing for COVID-19 and other unrelated conditions, finding that the relator “plausibly alleged materiality” regarding the purported “overbilling scheme.”
November 28, 2023
Michigan Panel Affirms Summary Disposition In PIP Fraud Case Involving Uber Driver

DETROIT — A Michigan appellate court affirmed a lower court’s grant of summary disposition to an insurer in its insured Uber driver’s suit seeking no-fault benefits after he was purportedly injured in an auto accident, finding that summary disposition was an appropriate remedy after the lower court correctly rescinded the insurance policy due to the insured’s denial in his insurance application that he was using the vehicle for a fee.
November 27, 2023
Unsecured Creditors Propose Liquidation Plan For Vesttoo And Its Affiliates

WILMINGTON, Del. — The Official Committee of Unsecured Creditors has proposed a Chapter 11 plan of liquidation for the jointly administered cases of Vesttoo Ltd. and 48 affiliates in Delaware federal bankruptcy court, with a Dec. 13 objection deadline.
November 22, 2023
11th Circuit Sends Questions To Florida High Court In GEICO Repair Act Fraud Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals certified to the Florida Supreme Court questions regarding whether violations of the Florida Motor Vehicle Repair Act prevent a repair shop from receiving payment from an insurance company in GEICO’s second appeal of a district court’s order granting summary judgment to a windshield repair shop and its owners, finding that certification is necessary because “[t]he questions presented are sufficiently unsettled, important, and likely to recur.”
November 21, 2023
Dismissal Denied In FCA Suit Against Maker Of Alleged Defective Knee Replacements

TUSCALOOSA, Ala. — An Alabama federal judge on Nov. 20 denied a motion to dismiss and for judgment on the pleadings by an orthopedic device manufacturer in relators’ suit asserting that the manufacturer violated the federal False Claims Act (FCA) by submitting for reimbursement to government health care programs claims for knee replacement devices it knew were defective, finding that the manufacturer’s argument that the court lacks jurisdiction due to the unconstitutionality of provisions of the FCA “lack[s] merit.”
November 21, 2023
Suit Claiming Skilled Nursing Facilities Violated FCA Tossed After Parties Settle

LOS ANGELES — A California federal judge dismissed the government’s claims against six skilled nursing facilities (SNFs), their owner and their management company two days after the U.S. Department of Justice announced that it entered into a $45.6 million consent judgment with the SNFs and related parties in a suit alleging that they violated the federal False Claims Act (FCA) and California False Claims Act in submitting false claims to Medicare by paying kickbacks to physicians in exchange for the physicians referring patients to the SNFs.
November 20, 2023
1st Circuit Certifies Appeal In FCA Suit Against Teva Alleging Co-Pay Kickbacks

BOSTON — The First Circuit U.S. Court of Appeals on Nov. 17 granted a petition to appeal filed by Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc., asserting that appeal should be granted due to a “substantial ground for difference of opinion” regarding causation under the Anti-Kickback Statute (AKS) as applied to a district court’s partial summary judgment ruling for the government in its suit alleging that they violated the False Claims Act (FCA) and AKS by using co-pay subsidies as kickbacks when selling a multiple sclerosis (MS) drug.