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

Mealey's Insurance Fraud

July 20, 2023
Judge Awards Low End Of Penalties In Libby, Mont., Asbestos Diagnosis Case

MISSOULA, Mont. — The federal judge in Montana overseeing the False Claims Act (FCA) dispute between a railroad and the provider of medical care under a special provision of the Patient Protection and Affordable Care Act (ACA) said $2,582,228 in statutory penalties, while at the low end of the permissible range, were sufficient to curtail “reckless disregard for proper medical procedure.”
July 19, 2023
Judge Rules On Judgment Motions In FCA Suit Against Teva Over Co-Pay Kickbacks

BOSTON —A Massachusetts federal judge “allowed” the government’s motion for partial summary judgment in its suit alleging that Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc. violated the False Claims Act (FCA) and Anti-Kickback Statute (AKS) by using co-pay subsidies as kickbacks when selling a multiple sclerosis (MS) drug, finding in part that violating the “AKS is per se material” for claims under the FCA.
July 13, 2023
5th Circuit Certifies Question In Tornado Coverage Dispute To Texas High Court

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on July 12 certified a question to the Texas Supreme Court in an insured’s lawsuit alleging that its insurer violated the Texas Prompt Payment of Claims Act (TPPCA), asking the state’s highest court whether an insurer’s payment of a full appraisal award for tornado damage plus any possible statutory interest bars the insured’s recovery of attorney fees.
July 12, 2023
New York Care Homes Respond To $83M Medicare Fraud Suit Seeking Injunction, Order

NEW YORK — After New York Attorney General Letitia James sued multiple nursing homes and their owners and operators in New York state court alleging fraud and illegal misuse of more than $83 million in Medicare and Medicaid funds, the respondents urged the court to reject the her request for a preliminary injunction requiring them to pay for two monitors to control the nursing homes’ operations, which they claim does not meet the “heightened standard” for injunctive relief.
July 11, 2023
Judge Rules On Dismissal Motion In Insurer’s $2.6M PIP Fraud Suit Against Clinics

NEWARK, N.J. — A New Jersey federal judge dismissed without prejudice in favor of arbitration claims for fraud and unjust enrichment in two insurers’ suit against chiropractic clinics to recover actual damages of more than $2.6 million in personal injury protection (PIP) benefits the insurers paid to the clinics, finding that the fraud “and unjust enrichment claims fall within the purview” of the no-fault law’s arbitration provision.
July 11, 2023
Whistleblower Seeks To Vacate Dismissal In FCA Suit Alleging Medicare Fraud

NEW YORK — One day after a New York federal magistrate judge issued an order granting a whistleblower physician permission to do so, the whistleblower moved to reopen a case dismissed by stipulation, asserting that he discovered new evidence in his federal and state false claims act violations suit against his former employer, a New York state health system, for alleged fraudulent billing to Medicare and Medicaid.
July 11, 2023
Subpoenas Issued In $9.8M Life Policy Row Related To Alleged Fraudulent Birthdate

NEW YORK — A New York federal judge granted a securities intermediary’s request to subpoena federal and state agencies in its breach of contract suit against a life insurer for failure to pay a $9.8 million death benefit, finding that the insured’s actual birthdate is “relevant” to the denial of coverage regarding the insured’s alleged fraud as to “misstatement of age.”
July 07, 2023
Washington High Court Issues Final Ruling On Insurer’s Incontestability Challenge

OLYMPIA, Wash. — The Washington Supreme Court denied a beneficiary’s motion for reconsideration and issued its final opinion in 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 while incontestability does not bar claims for fraud or lack of an insurable interest, the incontestability clause bars claims for lack of capacity that makes a contract “voidable rather than void.”
July 07, 2023
Pennsylvania Panel Says Nonrenewal Of Homeowners Policy Violated Insurance Law

HARRISBURG, Pa. — A Pennsylvania appellate court on July 6 issued an order to publish its opinion affirming a Pennsylvania insurance commissioner’s decision that an insurer’s cancellation and nonrenewal of a homeowners policy violated the Pennsylvania Unfair Insurance Practices Act, finding that the nonrenewal notice failed to comply with the act and that there was no material misrepresentation to justify policy cancellation.
July 06, 2023
Federal Judge Denies Interpleader In Coverage Dispute Over D&O Policy

SAN JOSE, Calif. — A California federal judge denied an insurer’s motion to amend a complaint to add an interpleader in its suit seeking a declaration that a directors and officers (D&O) insurance policy is rescinded because of the insureds’ material misrepresentations or a declaration that it has no duty to indemnify or defend in an underlying action, finding that allowing an interpleader “would be both futile and prejudicial.”
July 05, 2023
Judge Grants Default For Insurer, Says Insured Didn’t Disclose ‘Material Changes’

TAMPA, Fla. — A Florida federal judge on July 3 adopted a magistrate judge’s report and recommendation to grant default judgment and enter a declaratory judgment for the insurer in a suit against its insured, the driver and an injured passenger from another vehicle, finding that the insurer has no duty to defend, cover or indemnify its insured in an underlying suit related to a March 2021 accident because the insured failed to notify the insurer of “material changes” such as her change of address.
July 03, 2023
Magistrate Rules On GEICO’s Motion To Amend PIP Fraud Suit Against Surgery Center

TRENTON, N.J. — A New Jersey federal magistrate judge granted in part GEICO’s motion to file a second amended complaint in a suit against a surgery center and its affiliates alleging fraud related to personal injury protection (PIP) claims, finding that because GEICO had prior access to information in statutorily required assignment of benefits forms, it may not amend the complaint as to the forms but can amend on related issues, including claims against a chiropractor affiliated with the surgery center.
July 03, 2023
Panel Affirms Judgment For Insurer, Says Policy’s Fraud Terms Apply To Assignee

LAKELAND, Fla. — A Florida appellate court on June 30 affirmed a trial court’s order granting judgment for a homeowners insurer in a breach of contract suit filed against it by a roofer that replaced the homeowners’ hurricane-damaged roof, finding that though the roofer was an assignee of the insureds, it was subject to the policy’s fraud conditions.
July 03, 2023
U.S. High Court Vacates 11th, 4th Circuit Decisions That Affirmed FCA Dismissal

WASHINGTON, D.C. — The U.S. Supreme Court on June 30 issued a summary disposition, vacating and remanding 11th and Fourth U.S. Circuit Courts of Appeals decisions that affirmed dismissal of qui tam suits alleging violations of the federal False Claims Act (FCA) by violating Medicare rules or Medicaid price reporting, “in light of the decision” in United States ex rel. Schutte v. SuperValu Inc., Nos. 21-1326, 22-111, U.S. Sup. (2023).
June 29, 2023
Montana Jury Finds Against Screener In ACA-Asbestos Medicare Program Fight

MISSOULA, Mont. — A Montana jury on June 28 found that a medical screening company violated the False Claims Act (FCA) by knowingly submitting fraudulent asbestos-disease claims under a provision of the Patient Protection and Affordable Care Act (ACA) Medicare program designed for residents of Libby, Mont., and awarded $1,081,265.
June 26, 2023
Judge Extends Time For Chiropractors’ Reply In $14M RICO And Insurance Fraud Suit

HOUSTON — A Texas federal judge granted chiropractors and their affiliated practices an extension to reply in a suit filed against them by insurance companies seeking to recover more than $14 million in damages, asserting that the chiropractors and their practices participated in a fraudulent scheme regarding Racketeer Influenced and Corrupt Organizations Act (RICO) violations in billing the insurers for unnecessary or never performed procedures for personal injury protection (PIP) and uninsured motorist (UM) claims.
June 23, 2023
Panel Affirms Fire Loss Coverage Denial, Cites No Occupancy, Misrepresentation

NASHVILLE, Tenn. — A Tennessee appellate court affirmed a lower court’s determination that a homeowners insurance company properly denied a claim for fire-related property loss, finding the denial was supported by evidence showing that the property was unoccupied at the time of the fire, therefore precluding coverage, and that the policy was void because an insured misrepresented the items lost in the fire.
June 21, 2023
Federal Judge Dismisses FCA Suit Against PBM, Cites Public-Disclosure Bar

SAN DIEGO — A California federal judge dismissed a relator’s suit asserting that a pharmacy benefit manager (PBM) violated the False Claims Act (FCA) by enrolling beneficiaries of a federal government insurer in automatic delivery, resulting in beneficiaries receiving more drugs than medically necessary, finding that dismissal is warranted under the public-disclosure bar because a newspaper article and a U.S. Department of Defense rule “disclosed the allegedly fraudulent transactions at issue.”
June 21, 2023
7th Circuit: FCA Suit Properly Dismissed On Causation Grounds

CHICAGO — The Seventh Circuit U.S. Court of Appeals found that a former underwriter who alleged that a mortgage lender made false representations to the U.S. Department of Housing and Urban Development showed proof of materiality but failed to prove causation, affirming summary judgment in the lender’s favor and finding no error in the lower court’s rulings on expert testimony.
June 20, 2023
Judge Rules On Dismissal Motions In FCA Suit Alleging Fraudulent ACA Upcoding

SAN FRANCISCO — A federal judge in California denied an insurer’s motion to dismiss the federal government’s operative first amended complaint in intervention alleging federal False Claims Act (FCA) violations related to claims under the Patient Protection and Affordable Care Act (ACA) by upcoding, causing the government to overpay, finding that the government “sufficiently pled a factual falsity theory.”
June 16, 2023
Supreme Court Affirms Government’s Right To Dismiss FCA Suits Where It Intervened

WASHINGTON, D.C. — The U.S. government can move to dismiss a qui tam False Claims Act (FCA) suit in which it has intervened, regardless of whether the intervention occurred during the case’s initial seal period or at a later point, a U.S. Supreme Court majority held June 16.
June 14, 2023
Tennessee Panel Rules On Estate’s Claims For Life Insurance Fraud, Conversion

NASHVILLE, Tenn. — A Tennessee Court of Appeals affirmed in part a trial court decision finding for a decedent’s estate in its suit against his girlfriend for the proceeds of his life insurance policy, finding that the trial court did not abuse its discretion in determining that the beneficiary designation forms naming the girlfriend as sole beneficiary were not signed by the decedent.
June 06, 2023
COMMENTARY: State Laws Prohibiting Arbitration Of Insurance Disputes: Are They Pre-Empted by the New York Convention?

By Robert M. Hall
June 13, 2023
Relators Raise SuperValu In 8th Circuit Appeal Of Qui Tam Crop Insurance Row

ST. LOUIS — Relators who are asking the Eighth Circuit U.S. Court of Appeals to reverse vacation of judgment in a qui tam crop insurance case now contend that a recent U.S. Supreme Court decision “makes it clear” that a Minnesota federal court’s interpretation of “knowingly” “is not the correct legal standard.”
June 13, 2023
Motions To Dismiss, Amend, Transfer Or Stay Denied In Medicare Fraud Dispute

ATLANTA — A Georgia federal judge denied motions to dismiss, amend, transfer or stay in a company’s suit against radiologists who sold their practice to the company alleging that they breached their share purchase agreement by committing Medicare and Medicaid fraud, finding that the case and a Kentucky state court suit “involve distinct claims, obviating the risk of inconsistent judgments” and that the radiologists failed to show transfer is warranted because the parties agreed to litigate in Georgia courts.