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

Mealey's Insurance Fraud

February 28, 2023
Judge Denies Texas Doctor’s Dismissal Motion In RICO Insurance Fraud Suit

SAN ANTONIO — A Texas federal judge denied a physician’s dismissal motion in a Racketeer Influenced and Corrupt Organizations Act (RICO) fraud suit filed against him by insurers alleging that he submitted fraudulent medical bills inflating the severity of patients’ injuries for medically unnecessary injections, finding that the insurers alleged facts to link the physician’s purported fraudulent conduct to the insurers’ purported harm and have shown that the money the insurers paid for “alleged artificially inflated claims” belongs to them.
February 28, 2023
Sen. Grassley Urges High Court Reversal Of 7th Circuit In FCA Medicare Drug Cases

WASHINGTON, D.C. — Sen. Charles Grassley filed an amicus curiae brief in support of whistleblower qui tam petitioners asking the U.S. Supreme Court to overturn the Seventh Circuit U.S. Court of Appeals’ decisions affirming judgments for pharmacies in consolidated cases alleging that the pharmacies were fraudulently overcharging Medicare, Medicaid and the Federal Employee Health Benefits Program (FEP) for prescription drugs.
February 28, 2023
Supreme Court Hears Arguments About Federal Identity Theft Statute

WASHINGTON, D.C. — In oral arguments Feb. 28, the U.S. Supreme Court justices raised questions and concerns about vagueness, due process and interpretation as they examined the federal aggravated identity theft statute in the context of a psychologist convicted of health care fraud, with some of the justices opining that the statute broadly encompasses actions that would not typically be considered identity theft.
February 27, 2023
Grand Jury Indicts Owner Of N.C. Insurance Cos. Over Alleged Fraud Scheme

CHARLOTTE, N.C. — Alleging a fraud scheme in effect “at least” from roughly 2016 through 2019, the U.S. Department of Justice on Feb. 24 announced a grand jury indictment filed the previous day in North Carolina federal court against an individual who controlled multiple insurance companies, Greg E. Lindberg.
February 27, 2023
Health Care Fraud Defendant Seeks Lower Sentence After Doctor’s New Trial Denial

BIRMINGHAM, Ala. — After an Alabama federal judge denied a physician and his wife’s motions for a new trial following their convictions related to their involvement in an illegal controlled substance distribution and health care fraud scheme, one of their co-defendants, who pleaded guilty to conspiracy to commit health care fraud, moved Feb. 24 for a reduced sentence, asserting that an 18-month sentence is sufficient and “proportional to the degree of her involvement in and formulation of the scheme.”
February 24, 2023
Settlement Reached In Yacht Coverage Row Involving Captains’ Alleged Convictions

MIAMI — After parties filed a joint notice of settlement, a Florida federal judge issued an order closing an insurer’s suit seeking a determination that it owes no coverage to a yacht charter company in a separate state court action because the insurance policy issued to the company is void, in part, due to the company’s omission in its insurance application of two of the captains’ alleged criminal convictions.
February 24, 2023
Government Must Testify In Medicare-Asbestos Fraud Case, Judge Says

MISSOULA, Mont. — A federal judge in Montana granted a joint motion to compel trial testimony from two government entities on possibly fraudulent Medicare claims stemming from Libby, Mont., asbestos exposures, saying that they alone possessed the information and that the evidence was material to the case.
February 22, 2023
Judge Rules On Pain Clinic’s Dismissal Motion In GEICO’s No-Fault Fraud Suit

NEWARK, N.J. — A New Jersey federal judge granted in part a pain relief center and its affiliated physician’s dismissal motion in a suit filed against them related to purported fraudulent claims for medical expenses reimbursement under no-fault laws, finding that because claims under New Jersey’s Insurance Fraud Prevention Act (IFPA) “are not subject to arbitration under the No-Fault Laws,” the court retains jurisdiction over the IFPA claim, but an arbitrator will decide whether the defendants “violated RICO, committed common law fraud, or are liable for unjust enrichment.”
February 21, 2023
N.J. High Court Remands For New Trial To Allocate Fault In Insurance Fraud Suit

TRENTON, N.J. — The New Jersey Supreme Court reversed and remanded, in part, an appellate court’s determination that a new trial is needed on all issues in insurers’ fraud suit against construction companies and their officers and directors, finding that because the trial court erred by not applying provisions of the state Comparative Negligence Act (CNA), a new trial is warranted only on the issue of apportioning “percentages of fault under the CNA but not to the issue of compensatory damages” or liability.
February 16, 2023
Delaware Judge Rules On Fraud Claims In Row Over STOLI Policies

WILMINGTON, Del. — A Delaware judge granted in part a life insurer’s summary judgment motion in suits consolidated for trial that were filed against a life insurance policy administrator and its beneficial owner seeking a declaration that the two $5 million life insurance policies, one in each original suit, are void ab initio because they are stranger-originated life insurance (STOLI) policies, finding the policies statutorily void ab initio because they were paid for with nonrecourse funds and neither insured paid any of the premiums.
February 16, 2023
Federal Judge Affirms Orders As ‘Not Contrary To Law’ In FCA Medicare Fraud Suit

NEW YORK — A New York federal judge affirmed a magistrate judge’s orders excluding evidence and partially denying a relator’s motion to amend the complaint for the seventh time in a qui tam suit filed under federal and New York state False Claims Acts alleging that health systems defrauded the federal and state governments by submitting millions of dollars of false claims to Medicare and Medicaid for home health services, finding that the magistrate judge’s rulings in the nondispositive matters were not “clearly erroneous or contrary to law.”
February 16, 2023
Federal Judge Rules On Qui Tam FCA Suit Against Behavioral Health Provider

ALBUQUERQUE, N.M. — A New Mexico federal judge granted in part insurers’ motion to dismiss a qui tam suit filed against them under federal and state false claims act statutes regarding the insurers’ alleged false representations in their bid to administer state behavioral health services, finding that the false representation claims are statutorily time-barred and that the relator failed to provide evidence to support a state law Medicaid fraud claim.
February 14, 2023
Amendment And Dismissal Sought After Jurisdictional Discovery In Fraud Suit

WILMINGTON, Del. — Following a Delaware Chancery Court directive for a status update in a case concerning an alleged scheme to transfer funds from a reinsurance trust to affiliated entities and “highly volatile hedge funds,” the plaintiffs moved for leave to file a fourth amended complaint, and certain defendants moved to dismiss for failure to prosecute.
February 13, 2023
Dental Supplier Pays $100,000 To Settle False Claims Of Conflicted Sales Reps

BOSTON — Dental products seller OraPharma Inc. has agreed to pay $100,000 to settle false claims allegations that its sales account managers moonlighted as dental hygienists and pushed the use of an antibiotic, resulting in the filing of false claims to Medicare.
February 07, 2023
11th Circuit Tosses GEICO’s Appeal In Fraud Suit, Cites Lack Of Jurisdiction

ATLANTA — The 11th Circuit U.S. Court of Appeals on Feb. 6 dismissed GEICO’s appeal of a district court’s order granting summary judgment to a windshield repair shop and its owners, in a suit alleging that the shop and its owners committed fraud and violated the Florida Motor Vehicle Repair Act by submitting insurance claims for repairs that were unnecessary or not performed, finding that the 11th Circuit lacks jurisdiction because there is no final appealable decision.
February 02, 2023
2nd Circuit Issues Stipulation Order In Companies Appeal Of Insurers’ RICO Suit

NEW YORK — The Second Circuit U.S. Court of Appeals issued its fifth stipulation order pursuant to a local rule for dismissal without prejudice, withdrawing the case for stipulating parties to explore settlement through mediation in an appeal of a lower court order denying medical companies’ motion to dismiss no-fault insurers’ fraudulent billing suit against them.
February 02, 2023
Magistrate Denies Relator’s Motion For Protective Order In FCA Suit Over CMS Bids

LOUISVILLE, Ky. — A Kentucky federal magistrate judge denied a relator’s motion for a protective order regarding an expert’s supplemental deposition in a False Claims Act (FCA) suit alleging that Humana Inc. knowingly submitted false bids to the Centers for Medicare and Medicaid Services (CMS), resulting in overpayment to Humana, finding that the relator failed to show that “good cause exists for a protective order limiting the scope” of the deposition.
February 02, 2023
Judge Denies Dismissal In Insurance Rescission Suit, Cites Coverage Defenses

CHICAGO — An Illinois federal judge denied an indoor adventure park’s dismissal motion in a suit filed against the park by its insurer, seeking to rescind the policy issued to the park, regarding its duty to defend the park in a separate, underlying negligence suit, finding that regardless of whether the park’s representative signed the insurance application, the motion should be denied because the insurer’s second amended complaint (SAC) alleges sufficient reasons for policy rescission.
February 01, 2023
Insurer Granted Judgment In $650,000 Fraudulent Billing Suit For ‘Reckless’ Coding

DETROIT — A Michigan federal judge granted summary judgment to an insurer in a fraudulent billing suit against an ambulatory surgery center alleging that improper current procedural technology (CPT) coding resulted in the surgery center’s receiving an overpayment of $652,557, finding that the surgery center acted “reckless[ly]” by using surgical CPT codes for a nonsurgical procedure and that it was “unconscionable” for the surgery center to keep payment for services not provided.
February 01, 2023
Insurer’s Common-Law Fraud Claim Dismissed; New Jersey Statutory Fraud Claim Survives

CAMDEN, N.J. — Because an insured construction company’s duty to accurately report the number of vehicles it owns and to pay policy premiums stems from its insurance policies, the company’s alleged misrepresentations about the number of vehicles it owns “are embodied within specific contractual terms,” a federal judge in New Jersey ruled, granting the company’s motion to dismiss an insurer’s common-law fraud claim against it as barred by the economic loss doctrine.
January 31, 2023
New Trial Bid Denied, Farmers Sentenced In Crop Insurance Case

PIERRE, S.D. — Two farmers convicted of making false statements regarding crop insurance were sentenced Jan. 30 after a South Dakota federal judge denied their motion for a judgment of acquittal or a new trial, which included allegations that the verdict form was not consistent with the polling of the jury.
January 31, 2023
Judge Says Fact Disputes Remain About Tenants, ‘Fire Safeguards’ In Coverage Row

NEWARK, N.J. — A New Jersey federal judge denied summary judgment for an insurer that was sued by its insured after denying the insured’s claim for fire-related damages in a building with both commercial and residential tenants, finding that disputed facts remain regarding the existence of operating smoke detectors in the building and the veracity of the owner’s testimony as to whether the alleged misrepresentation was material to the insurer’s fire investigation.
January 31, 2023
Finding For Insurer Reversed For Remaining Issues Of ‘Material Misrepresentation’

DETROIT— The Michigan Court of Appeals reversed and remanded a summary disposition award for an auto insurer in a no-fault benefit coverage suit filed by its insured, seeking coverage for injuries incurred in an auto accident, finding “that there remains a genuine issue of material fact that forecloses an award of summary disposition”
January 31, 2023
Disposition Affirmed For Insurer In Pedestrian No-Fault ‘False Information’ Claim

DETROIT — The Michigan Court of Appeals affirmed a lower court’s summary disposition for an insurer in a personal injury protection (PIP) suit filed by a pedestrian injured after being hit by a motor vehicle, finding that the pedestrian “committed a fraudulent insurance act” by giving false medical history information when applying for no-fault insurance benefits.
January 30, 2023
Commercial Insurer Wins Judgment Finding Policy Void From Inception

BROOKLYN, N.Y. — Judgment was entered in favor of an insurer after a federal judge in New York adopted a magistrate judge’s finding that the insurer had established that a company made material misrepresentations in its application for a businessowners policy, with the court entering a declaratory judgment that the policy is void from its inception and that the insurer is not obligated to pay any claims the company submits.