Mealey's Insurance Fraud
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July 10, 2022
Insureds Appeal Stay Ruling, Insurers Appeal Injunctive Denial To 2nd Circuit
BROOKLYN, N.Y. — No-fault insurers on June 29 cross-appealed to the Second Circuit U.S. Court of Appeals a New York federal judge’s denial of their motion to stay all pending state court actions filed against them by medical provider insureds. Their appeal joins those of two groups of insureds who notified the court earlier in the month of their appeal of a stay of all pending and future arbitrations and any future court proceedings against the insurers.
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July 08, 2022
Disability Insurer Properly Rescinded Policy Based On Insured’s Misrepresentations
CENTRAL ISLIP, N.Y. — A New York federal magistrate judge on June 30 recommended granting summary judgment in favor of a disability insurer after determining that the insurer properly rescinded a disability policy based on fraudulent and material misrepresentations made by the insured regarding a preexisting neck condition and that the insurer did not act in bad faith in handling the insured’s claim.
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July 01, 2022
Cert Petition Filed Seeking Review Of Medicare Fraud Standards In Hospice Care
WASHINGTON, D.C. — With splits among U.S. Circuit Courts of Appeals regarding Medicare fraud standards in hospice certifications, U.S. Supreme Court review is warranted, a man contends in his June 22 petition for writ of certiorari, after his federal conviction in a health care fraud scheme was upheld by the Fifth Circuit U.S. Court of Appeals.
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June 30, 2022
6th Circuit: Court Erred In Granting Injunction In Fraud Suit Involving Chris Brown
CINCINNATI — The Sixth Circuit U.S. Court of Appeals held on June 28 that a lower federal court erred in enjoining a state court action with a federal coverage lawsuit under the Anti-Injunction Act, vacating the injunction and reversing and remanding the ruling arising from a $2.5 million jury award in favor of the lessee of a recording studio owned by musician Chris Brown, who was found liable in 2020 for submitting a fraudulent insurance claim of a burglary and fire at his Memphis, Tenn., building that housed the recording studios.
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June 29, 2022
Trust Asks Delaware High Court To Reverse, Remand Rulings In STOLI Dispute
NEW CASTLE, Del. — Wilmington Trust, National Association on June 10 asked the Delaware Supreme Court to reverse a lower court’s dismissal of its promissory estoppel counterclaim in a Stranger Oriented life insurance (STOLI) policy dispute, further asking the state’s highest court to remand for further briefing on whether the insurer must pay “$19 million in death benefits because of promissory estoppel, waiver, equitable estoppel, laches, and/or unclean hands.”
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June 29, 2022
Pharmacies Refute Relator’s 9th Circuit Appeal In False Claims Act Suit
SAN FRANCISCO — Pharmacies on June 17 answered a relator’s appeal asking the Ninth Circuit U.S. Court of Appeals to reverse a federal district court’s dismissal of her qui tam action alleging that they engaged in a fraudulent scheme to induce public and private insurers to grant prior authorizations for prescriptions, contending that the relator’s appeal is a “final attempt to breathe life into her hollow claims.”
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June 29, 2022
Magistrate Recommends $50K Judgment For Fraudulent Prescriptions, No RICO Damages
BROOKLYN, N.Y. — A New York federal magistrate judge on June 24 recommended awarding Government Employees Insurance Co. (GEICO) and three related entities damages of nearly $50,000 against a doctor for aiding and abetting fraud by submitting fraudulent claims for unneeded prescription pain medicines, but didn’t recommend higher damages after finding that GEICO failed to plead a racketeering claim against him.
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June 29, 2022
Petitioners Respond To Government, Urge High Court To Review FCA Pleading Standard
WASHINGTON, D.C. — Pointing out “the obvious problem” with the government’s argument in a May 24 amicus brief that “‘courts have largely converged on an approach that allows relators either to identify specific false claims or to plead other sufficiently reliable indicia supporting a strong inference that false claims were submitted to the government,’” petitioners in a June 7 supplemental brief urge the U.S. Supreme Court to review dismissal of their False Claims Act (FCA) lawsuit against a hospice that allegedly paid illegal kickbacks to physicians for referrals and submitted fraudulent claims to Medicare.
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June 29, 2022
Michigan Panel Won’t Reconsider Ruling Insurer Can’t Rescind Policy Over PIP Claims
LANSING, Mich. — A Michigan Court of Appeals panel in a one-sentence June 23 order denied an insurer’s motion for reconsideration of its May ruling that the insurer cannot rescind an automobile policy or “flatly reject” its insured’s claims for attendant care or replacement services in a coverage dispute over personal injury protection (PIP) benefits.
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June 29, 2022
Insurer Urges 3rd Circuit To Affirm Judgment In Material Misrepresentation Case
PHILADELPHIA — An insurer is entitled to summary judgment because there is “no dispute” that its auto repair shop insured submitted altered invoices in a claim for water damage, and the insured’s argument that it did not make misrepresentations “is unsupported by the records and was not timely presented to the district court,” the insurer tells the Third Circuit U.S. Court of Appeals in a June 15 brief urging it to affirm the lower court’s ruling in its favor.
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June 28, 2022
Georgia High Court Holds Oral Arguments In Third Party’s Viatical Policy Dispute
ATLANTA — The Georgia Supreme Court on June 22 held oral arguments on two questions certified by the 11th Circuit U.S. Court of Appeals seeking guidance on whether a third party with no insurable interest must be involved in the procurement of a life insurance policy before that policy can be deemed an unlawful human life wagering contract under Georgia law.
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June 28, 2022
Utah Court Affirms Fraud Exclusion Bars Coverage For Underinsured Motorist Claim
SALT LAKE CITY — A trial court correctly interpreted the fraud exclusion in an auto insurance policy as preluding benefits “related to a particular accident when fraudulent statements were made in connection with that accident,” the Utah Court of Appeals ruled June 24, affirming the lower court’s grant of summary judgment to the auto insurer.
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June 28, 2022
In Reversal, Michigan Panel Rules That Insurer’s Statement Established Materiality
DETROIT — In an unpublished opinion noting several disagreements with the trial court, a Michigan Court of Appeals panel on June 23 reversed and remanded a decision centered on misrepresentations made in an automobile insurance application, ruling in part that under Michigan law, an insurer “was not required to demonstrate that [the insured’s] misrepresentations were causally connected to the loss to demonstrate materiality.”
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June 28, 2022
2 Groups Of Insureds Appeal Stay Of Arbitrations Against Insurer To 2nd Circuit
BROOKLYN, N.Y. — Medical provider insureds on June 19 appealed to the Second Circuit U.S. Court of Appeals a New York federal court’s order staying all pending and future arbitrations and any future court proceedings against no-fault insurers, joining another group of insureds who filed a similar notice of appeal on June 15.
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June 27, 2022
Government Sues Care Homes Under False Claims Act, Alleging ‘Substandard’ Care
PHILADELPHIA — The U.S. government on June 17 filed a first amended complaint in Pennsylvania federal court against three nursing homes in Pennsylvania and Ohio, asserting claims under the False Claims Act (FCA) and common-law claims of payment by mistake and unjust enrichment related to alleged “grossly substandard nursing home services to Medicare and Medicaid beneficiaries” at the homes, seeking treble damages under the FCA for Medicare and Medicaid fraud claims.
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June 21, 2022
Relator Appeals Dismissal Of False Claims Complaint Against No-Fault Insurers
ATLANTA — The widow of an injured man on May 31 filed a corrected brief with the 11th Circuit U.S. Court of Appeals, seeking reversal of a judgment that dismissed the couple’s False Claims Act (FCA) suit against insurers alleging that they caused the man’s health care providers to present false claims to the Centers for Medicare and Medicaid Services (CMS) and that by hiding purported responsibility as primary payers, the insurers forced the couple to reimburse CMS for post-settlement medical care.
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June 20, 2022
‘Evidence Easily’ Supports Defendants’ Fraud Convictions, U.S. Tells 11th Circuit
ATLANTA — The United States on June 13 argued to the 11th Circuit U.S. Court of Appeals that the evidence easily supports defendants’ health care and mail fraud convictions stemming from their involvement in a scheme to submit bills to insurance companies for medically unnecessary prescriptions for a compounding pharmacy’s drugs, further arguing that the lower federal court did not clearly err in calculating restitution and forfeiture amounts.
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June 17, 2022
Judge Enjoins Medical Device Company From Filing Collection Actions Against GEICO
BROOKLYN, N.Y. — A New York federal judge on June 2 granted GEICO’s motion to enjoin a medical device supplier from filing new collections actions against it in a declaratory judgment suit seeking a judgment that it is not obligated to pay the supplier’s claims for durable medical equipment that was allegedly not provided, finding that GEICO would “suffer irreparable harm” without enjoining “new actions and arbitration proceedings.”
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June 17, 2022
Judge Strikes Report Of Expert Witness On Billing In Insurance Fraud Dispute
TAMPA, Fla. — A Florida federal judge on June 14 agreed to strike a report and exclude testimony at trial in an insurer’s suit seeking to recover $2.1 million for allegedly fraudulent no-fault insurance charges, finding a violation of Federal Rule of Civil Procedure 26 because an expert witness retained by a health care clinic and its personnel “did not substantially participate in preparing the Report.”
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June 17, 2022
Hospital Refutes Amicus’ Assertion That Court Order ‘Guts’ California’s IFPA
LOS ANGELES — A hospital on May 5 filed an answer to The Anti-Fraud Alliance’s amicus curiae brief in support of the state of California in a qui tam lawsuit alleging that the hospital participated in kickbacks, patient steering and billing fraud schemes, contending that nothing in the amicus brief provides any basis to warrant reversal of a lower court’s judgment in its favor in the action brought under the California Insurance Frauds Prevention Act.