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

Mealey's Insurance Fraud

November 16, 2023
DOJ Announces $45.6M Judgment In FCA Suit Against Skilled Nursing Facilities

WASHINGTON, D.C. — The U.S. Department of Justice (DOJ) on Nov. 15 announced that six skilled nursing facilities (SNFs), their owner and their management company have entered into a $45.6 million consent judgment to resolve allegations 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 16, 2023
Judgment Denied For Short-Term Health Insurer In $250K Cancer Treatment Dispute

OKLAHOMA CITY — An Oklahoma federal judge denied summary judgment for a short-term health insurer in its insured’s breach of contract suit for rescinding his policy and failing to cover his colon cancer treatment over alleged material misrepresentations in the policy application, finding that questions remain as to the insured’s agreeing to rescission and the reasonableness of the insurer’s conduct in ensuring that the insured received his policy benefits.
November 14, 2023
Conversion Bid Denied, Exclusivity Terminated In Vesttoo Bankruptcy Cases

WILMINGTON, Del. — A Delaware federal bankruptcy judge has denied without prejudice a U.S. trustee’s motion to convert the jointly administered Chapter 11 cases of Vesttoo Ltd. and 48 affiliates to Chapter 7 cases.
November 13, 2023
Insurer’s Suit Seeking To Void Life Policies Dismissed In Incontestability Dispute

SEATTLE — A Washington federal judge issued a minute order dismissing a group life insurer’s suit seeking a declaratory judgment that policies were void for fraud, incapacity or absence of an insurable interest despite the policies’ incontestability clause, finding that there are no remaining issues because the judge was notified of a settlement in the case.
November 09, 2023
Class Certification Granted In Exchange Act Suit Related To Teva FCA Violations

PHILADELPHIA — A Pennsylvania federal judge granted class certification in a putative class action alleging that Teva Pharmaceuticals Industries Ltd. and its executives violated the Securities Exchange Act by artificially raising the price of its stock and concealing information about the multiple sclerosis drug Copaxone, the subject of a False Claims Act (FCA) suit alleging that Teva engaged in a kickback scheme that increased the price of the drug, finding that the lead plaintiff satisfied the standards for class certification, including numerosity, typicality, commonality and adequacy.
November 08, 2023
Nursing Homes’ Affirmative Defenses Stricken In FCA Suit Over ‘Substandard’ Care

PHILADELPHIA — A Pennsylvania federal judge on Nov. 7 granted in part the U.S. government’s motion to strike affirmative defenses asserted by nursing home defendants’ in a suit asserting common law claims and violations of the False Claims Act (FCA) related to alleged “grossly substandard nursing home services to Medicare and Medicaid beneficiaries,” finding that the affirmative defenses of waiver and ratification and accord and satisfaction are not valid but that the mitigation of damages defense must be stricken only as to the FCA claims and not the common law claims.
November 08, 2023
Debtors In Vesttoo Bankruptcy Cases Note Agreement With Unsecured Creditors

WILMINGTON, Del. — In a Nov. 7 objection to conversion to Chapter 7, Chapter 11 debtors Vesttoo Ltd. and 48 affiliates tell a Delaware federal bankruptcy court that they hope to close on a sale of assets “around December 1” and “if such a sale is not possible or cannot come together in that time frame . . . will have worked with [the Official Committee of Unsecured Creditors] toward a singular liquidating plan.”
November 07, 2023
Judgment Granted To Nationwide In Truck Theft Row Over Insured’s Misrepresentation

SCRANTON, Pa. — A Pennsylvania federal judge granted summary judgment to Nationwide in a breach of contract and bad faith suit over Nationwide’s failure to cover an auto insurance claim when its insured’s truck was purportedly stolen and burned, finding that because the insured failed to show that “Nationwide lacked a reasonable basis in denying his claim” due to the insured’s purported material misrepresentations, summary judgment is appropriate.
November 07, 2023
Judge Allows Law Firm To Intervene To Enforce Lien Against D&O Policy Proceeds

SAN JOSE, Calif. — A federal judge in California 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, permitting the firm to enforce a charging lien against the proceeds of the policy.
November 06, 2023
6th Circuit Affirms Order Granting Judgment To Hospital In FCA Retaliation Dispute

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a district court’s order granting summary judgment to a hospital and denying as moot a motion to disqualify opposing counsel in a surgeon’s suit alleging violations of the False Claims Act (FCA) related to the hospital’s purported retaliation against him, finding that while the district court should have first ruled on the motion to disqualify before ruling on summary judgment, “remand is not required” because the surgeon failed to file the motion to disqualify on time.
November 06, 2023
Judge Dismisses Claims Against Relator Related To Legal Advice In FCA Billing Suit

ATLANTA — A Georgia federal judge dismissed in part counterclaims against a relator in her federal False Claims Act (FCA) suit against a durable medical equipment (DME) company and its manager alleging that they fraudulently billed the U.S. government for DME that was medically unnecessary, finding that counterclaims for negligence per se and breach of fiduciary duty regarding the relator’s alleged unlicensed practice of law fail to show harm.
November 06, 2023
GEICO Files $1.8M Suit Against Doctor, Pain Clinic Over Fraudulent PIP Claims

NEWARK, N.J. — GEICO filed suit in a New Jersey federal court against doctors and other medical practitioners and their practices, alleging that they participated in a “complex fraudulent scheme” to submit fraudulent personal injury protection (PIP) billing to GEICO for services that were either not performed or not medically necessary, resulting in damages to GEICO of more than $1.8 million.
November 03, 2023
Federal Judge Enters Default Judgment, Voids Yacht Owner’s Maritime Policy

TAMPA, Fla. — A Florida federal judge on Nov. 3 entered a docket-only order directing the court clerk to enter a final default judgment against a yacht owner and void his policy in a maritime insurer’s suit seeking a declaratory judgment that because the owner misrepresented his compliance with recommendations in a yacht survey, the policy is void.
November 02, 2023
Pharma Company Agrees To Pay Up To $50M In FCA Suit Over Medicaid Rebate Dispute

WASHINGTON, D.C. — The U.S. Department of Justice (DOJ) announced that Nostrum Laboratories Inc. and its CEO and founder, Nirmal Mulye, have agreed to pay a minimum of $3,825,000, and up to $50 million based on contingencies such as specified earnings or other payments received, to settle allegations that the company and Mulye violated the False Claims Act (FCA) by underpaying Medicaid rebates to state Medicaid programs covering the drug Nitrofurantoin Oral Suspension (Nitro OS).
November 01, 2023
Dismissal Denied In FCA Suit Filed By Doctor Refusing To ‘Play Ball’ With Provider

TAMPA, Fla. — A Florida federal judge denied dismissal motions filed by a Medicare Advantage organization (MAO) and an independent physician association (IPA) in a physician’s qui tam suit against them alleging violations of the federal False Claims Act (FCA) for his purported refusal to “play ball” to artificially increase patients’ risk assessment scores, finding that the physician credibly alleged that his protected conduct of trying to stop alleged FCA violations resulted in purported retaliation and loss of his patients.
November 01, 2023
8th Circuit Denies Panel Rehearing In Qui Tam Crop Insurance Case

ST. LOUIS — A petition for panel rehearing of a qui tam crop insurance case in which a ruling against relators was upheld has been denied without explanation; in seeking rehearing, the relators argued that the Eighth Circuit U.S. Court of Appeals “overlooked facts in the record” and “misapprehended the import” of United States ex rel. Schutte v. SuperValu Inc.
November 01, 2023
Stay Granted In Insurance Rescission Suit Due To Overlap With Underlying Case

SAN FRANCISCO — A California federal judge granted a stay in an insurer’s suit against its insured and a lessee contracting with the insured for a remodeling project, seeking rescission of policies and a declaratory judgment that there is no duty to defend and indemnify the insured in an underlying negligence suit regarding the remodeling project, finding that factors weigh in favor of a stay, including the overlapping facts in the underlying action and the declaratory judgment suit.
October 31, 2023
Conversion To Chapter 7 Sought For Vesttoo Bankruptcy Cases By U.S. Trustee

WILMINGTON, Del. — A Delaware federal bankruptcy judge on Oct. 30 set a Nov. 8 hearing on a motion to convert the jointly administered Chapter 11 cases of Vesttoo Ltd. and 48 affiliates to Chapter 7 cases.
October 31, 2023
2nd Circuit Affirms Dismissal Of FCA Suit Against Bank For Lack Of Materiality

NEW YORK — The Second Circuit U.S. Court of Appeals on Oct. 30 affirmed a district court’s dismissal of a relator’s qui tam suit brought on behalf of the Federal Deposit Insurance Corp., alleging that a bank violated the False Claims Act (FCA) when it purchased loans from the FDIC but failed to manage the loans to minimize losses to the FDIC, finding that the relator failed to meet the materiality requirements of the FCA.
October 30, 2023
9th Circuit Affirms Judgment In Insurance Fraud Dispute Over Employee’s Status

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals issued a corrected opinion, affirming a district court’s summary judgment for an insurance broker acting as a licensed agent for a health insurer awarded $2.4 million in damages when its insured company was found liable for fraud regarding classifying an employee incorrectly as full time, finding, in part, that the district court correctly determined that the broker did not act outside its agency authority for the health insurer.
October 27, 2023
Physician Appeals $27M Judgment In FCA Suit Over ‘Alternative’ Therapy Billing

ROME, Ga. — A physician and his medical practice provided notice to a Georgia federal court that they are appealing to the 11th Circuit U.S. Court of Appeals a $27,567,729 judgment for violations of the False Claims Act (FCA) related to billing Medicare for use of a chelation therapy drug for “alternative” therapy not covered by Medicare after a jury returned a verdict for the U.S. government, finding that all 4,407 claims submitted for reimbursement violated the FCA.
October 26, 2023
Counsel Advises Of Resolution In Commercial Insurance Dispute Over Fire Loss

WILLIAMSPORT, Pa. — Counsel for a property owner suing his commercial property insurer for breach of contract advised a Pennsylvania federal judge that the owner and insurer had resolved the case 11 days after the judge denied certain motions in limine to exclude evidence of purchase and post-fire sale prices of property where a building burned down and the insurer denied coverage, asserting that the fire was intentional.
October 25, 2023
Insurer’s Motion To Exclude Exhibit Granted As To Waiver In Insurance Coverage Row

DAYTON, Ohio — An Ohio federal judge granted in part an insurer’s motion in limine to exclude an exhibit that includes a homeowners policy endorsement, finding that the homeowners may not use the exhibit to argue that the insurer waived a fraud defense because the insurer acted under the endorsement when refusing to cover the homeowners’ additional living expenses (ALE) claim after discovering the homeowners’ alleged fraudulent conduct.
October 24, 2023
Judgment Granted For Lessee In $2.5M Insurance Fraud Row Involving Chris Brown

MEMPHIS, Tenn. — A Tennessee federal judge on Oct. 23 granted summary judgment to the lessee of a recording studio owned by musician Chris Brown, who was previously found liable for submitting a fraudulent insurance claim for burglary and fire at his studio, finding that claim preclusion prevents the insurer from asserting claims against the lessee, who had received a $2.5 million jury award.
October 20, 2023
Partial Dismissal Granted In FCA Suit Against Suboxone Maker Over False Pricing

ABINGDON, Va. — A Virginia federal judge lifted a stay and granted partial dismissal in a relator’s qui tam suit alleging that a suboxone manufacturer violated the federal False Claims Act (FCA) and state law false claims acts by falsely reporting best price data for Suboxone, finding that the FCA claims of misreporting best price, making false statements and retaliation must be dismissed but that the relator’s conspiracy and reverse false claims may proceed.