Mealey's Insurance Fraud
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June 17, 2019
State Farm Can Depose Nonparty In Fraud Suit, Magistrate Judge Rules
DETROIT — A federal magistrate judge in Michigan on June 14 denied a motion to quash a subpoena for a deposition filed by the manager of an imaging clinic who is not a party to fraudulent billing scheme lawsuit brought by State Farm Mutual Automobile Co., finding that it would not pose an undue burden (State Farm Mutual Automobile Insurance Company v. Elite Health Centers Inc., et al., No. 16cv13040, E.D. Mich., 2019 U.S. Dist. LEXIS 99897).
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June 17, 2019
Motion To Remand Water, Mold Damage Suit Denied; Judge Says Damages Exceed $75K
BIRMINGHAM, Ala. — An Alabama federal judge on June 14 denied a motion to remand filed by insureds alleging claims for breach of contract and bad faith arising out of a water and mold damage claim after determining that the insurers produced sufficient evidence showing that the amount in controversy exceeds the federal jurisdictional minimum of $75,000 (Matthew B. Menendez, et al. v. American Strategic Insurance Corp., et al., No. 19-443, N.D. Ala., 2019 U.S. Dist. LEXIS 99975).
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June 13, 2019
New York High Court Affirms Ruling Relieving Auto Insurers Of $20M In Claims
ALBANY, N.Y. —New York’s highest court on June 11 affirmed an appeals court’s ruling that stood by a jury’s verdict that 54 New York automobile insurers and self-insurers are not responsible for paying $20 million in pending claims because a physician did not own and control the professional medical corporation under whose name he sought to collect first-party no-fault benefits from the insurers, finding that the lower court did not err in declining to give a jury charge that required a finding of fraudulent intent or conduct that was "tantamount to fraud" to reach its verdict in the insurers’ favor (Andrew Carothers, M.D., P.C. v. Progressive Insurance Company, No. 39, N.Y., App., 2019 N.Y. LEXIS 1641).
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June 7, 2019
Pharmacist Agrees To Pay $100,000 To Settle False Claims Act Suit
ALBANY, N.Y. — A New York pharmacist on June 5 entered into an agreement with the federal government in New York federal court to pay $100,000 to resolve allegations that she violated the federal False Claims Act (FCA) as well as the state’s version of the statute when falsely billing Medicare and Medicaid from March 2010 through March 2017 for prescriptions that were never dispensed to patients (United States, ex rel. Barbara Lopez v. Nassau Pharmacy, No. 16-cv-1338, N.D. N.Y.).
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June 4, 2019
Judge Accepts Woman’s Change Of Plea To Guilty For Submitting False Bills
CHICAGO — A federal judge in Illinois on May 30 accepted a woman’s change of plea from not guilty to guilty on one charge of conspiracy to commit health care fraud for her role in the submission of $1.7 million in false bills to the U.S. Department of Labor’s Office of Workers Compensation Programs (OWCP) for constant treatment of one patient that she was not providing (United States v. Chante Carrothers, et al., No. 18cr374, N.D. Ill.).
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June 3, 2019
Ohio Panel Upholds Denial Of Insurance Fraud Defendant’s New Trial Request
CLEVELAND — An Ohio appeals panel on May 30 affirmed the denial of a man’s delayed motion for a new trial after he was found guilty of insurance fraud and aggravated arson, holding that a U.S. Supreme Court’s ruling did not constitute newly discovered evidence that warranted the delay (Ohio v. Dale Rodano, No. 107880, Ohio App., 8th Dist., 2019 Ohio App. LEXIS 2178).
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May 23, 2019
Podiatrist Gets 24-Month Sentence For Submitting False Bills To Medicare
TUCSON, Ariz. — A federal judge in Arizona on May 20 sentenced a podiatrist who submitted fraudulent bills to Medicare for procedures that were never performed on patients in assisted living facilities to 24 months in prison (United States v. Loren Wessel, No. CR-17-978, D. Ariz.).
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May 23, 2019
Pennsylvania Panel Partially Vacates Ruling Suppressing Evidence Of Fire
HARRISBURG, Pa. — A Pennsylvania appeals panel on May 21 vacated in part a lower court judge’s ruling suppressing the admission of a draft report prepared by an expert regarding the cause of a fire that was allegedly started to submit a fraudulent insurance claim, ruling that a search warrant issued to obtain the report was valid and that the report was not protected from disclosure by the work product doctrine (Pennsylvania v. Shawn Anthony Schaefer, No. 1204 WDA 2018, Pa. Super., 2019 Pa. Super. Unpub. LEXIS 1981).
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May 21, 2019
11th Circuit Affirms Sentence For Fraud Scheme, Vacates Restitution Award
ATLANTA — A chiropractor’s 84-month sentence for engaging in a scheme to submit fraudulent claims to insurance companies for patients who were purportedly injured as a result of staged auto accidents was affirmed by an 11th Circuit U.S. Court of Appeals panel on May 20, but the panel vacated the amount of restitution he must pay because some claims may have been filed before he was hired by a clinic that participated in the scheme (United States v. Hal Mark Kreitman, No. 18-12838, 11th Cir., 2019 U.S. App. LEXIS 14760).
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May 21, 2019
Doctor Sentenced To 37 Months For Role In Unbundling Medicare Claims
BATON ROUGE, La. — The co-owner of a pain management clinic was sentenced by a federal judge in Louisiana on May 17 to 37 months in prison for his role in a fraudulent billing scheme that involved unbundling nonreimbursable office visits from minor surgical procedures and submitting the visits to Medicare (United States v. John E. Clark, No. 17cr85, M.D. La.).
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May 16, 2019
Medical Equipment Company Owner Sentenced For Submitting False Bills To Medicaid
MCALLEN, Texas— A woman who owned a medical equipment company was sentenced by a federal judge in Texas May 9 to 78 months in prison after she pleaded guilty to one count of health care fraud for fraudulently billing Texas Medicaid for incontinence supplies provided to beneficiaries (United States v. Anna Ramirez-Ambriz, No. 17cr56, S.D. Texas).
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May 16, 2019
Florida Clinic Owner Sentenced To 91 Months In Prison For Fraud Scheme
MIAMI — The owner of a Florida clinic was sentenced to 91 months in prison and ordered to pay $2.5 million in restitution by a federal judge in Florida on April 30 after she pleaded guilty to charges of conspiracy to commit health care fraud and conspiracy to defraud the United States by paying and receiving health care kickbacks (United States v. Juliette A. Tamayo, No. 18cr20535, S.D. Fla.).
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May 16, 2019
Cardiologist Appealing Sentence For Implanting Medically Unnecessary Stents
ASHLAND, Ky. — A cardiologist who was found guilty on one count of health care fraud and 10 counts of making false statements relating to health care matters on May 15 filed a notice of appeal in Kentucky federal court stating that he will ask the Sixth Circuit U.S. Court of Appeals to review his five-year prison sentence and $1.1 million restitution order (United States v. Richard E. Paulus M.D., No. 15cr15, E.D. Ky.).
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May 16, 2019
Man Sentenced For Submitting Bills For Unnecessary Genetic Testing For Elders
TRENTON, N.J. — A federal judge in New Jersey sentenced a man to 50 months in prison on May 13 after he pleaded guilty to one count of conspiracy to commit health care fraud and admitted using a nonprofit organization to convince elderly patients to undergo unnecessary genetic testing and submitting the bills to Medicare (United States v. Seth Rehfuss, No. 18cr134, D. N.J.).
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May 16, 2019
False Claims Act Suit Over Billing For Leftover Medications Dismissed
MIAMI — A federal judge in Florida on May 7 dismissed with prejudice a False Claims Act (FCA) lawsuit brought by two compound medication mixers against two companies, two doctors and an employee that accused the defendants of falsely billing Medicare, Tricare and other insurers for using leftover amounts of single-dose vial (SDV) medications, finding that the relator failed to allege that the defendants actually submitted claims for the leftover medications (United States, ex rel. Miguel A. Fernandez, et al. v. Miami Cancer Institute, et al., No. 17-24051-Civ-Scola, S.D. Fla., 2019 U.S. Dist. LEXIS 75529).
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May 15, 2019
Doctors’ Motion For Mistrial In Insurance Fraud Case Denied By Judge
HOUSTON — A federal judge in Texas on May 14 denied a motion for mistrial filed by two doctors who were found guilty on 21 counts of health care fraud by a jury, holding that two references to a co-defendant’s guilty plea and testimony from a government expert about a health care fraud conviction of a technician who worked for one of the defendant doctors were not prejudicial enough to warrant vacating the verdict (United States v. Harcharan Singh Narang, et al., No. H-17-290, S.D. Texas, 2019 U.S. Dist. LEXIS 80937).
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May 14, 2019
7th Circuit Says Interest From Bank Accounts Should Apply To Doctor’s Restitution
CHICAGO — A Seventh Circuit U.S. Court of Appeals panel ruled May 13 that a federal judge in Illinois erred when refusing to credit interest earned in four bank accounts containing funds that were obtained as part of a cardiologist’s insurance fraud scheme to his restitution, explaining that the U.S. marshals put the money from the accounts in an interest-bearing account that earned $225,000 and that pursuant to the doctor’s plea agreement with the government, the proceeds of all seized funds and forfeited property would be applied to the restitution amount (United States v. Sushil A. Sheth, No. 17-2741, 7th Cir., 2019 U.S. App. LEXIS 14173).
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May 9, 2019
5th Circuit Vacates Dismissal Of Former Hospice Care Worker’s False Claims Suit
NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on May 7 overturned a federal judge in Texas’ ruling dismissing a False Claims Act (FCA) suit brought by four former workers for a hospice care provider, finding that their claims for fraud satisfied the heightened pleading requirement of Federal Rule of Civil Procedure 9(b) and that the allegations in the complaint sufficiently showed that the misrepresentations their former employer made to Medicare were material (United States, ex rel. Deborah Lemon, et al. v. Nurses To Go Inc., et al., No. 18-20326, 5th Cir., 2019 U.S. App. LEXIS 13634).
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May 2, 2019
Drug Maker Agrees To Pay $17.5M To Resolve Suit Over Kickbacks
NEW HAVEN, Conn. — US WorldMeds LLC (USWM) agreed to pay $17.5 million to resolve allegations brought by two whistleblowers under the qui tam provisions of the False Claims Act (FCA) that accused the drug maker of engaging in a scheme to pay kickbacks to physicians and patients for prescriptions of the Parkinson’s disease drug Apokyn and cervical dystonia treatment Myobloc, according to an order entered in Connecticut federal court on April 30 (United States, ex rel. Brian Bennett v. US WorldMeds LLC, No. 13cv363, United States, ex rel. Robert Chinnapongse v. US WorldMed LLC, No. 16cv0804, D. Conn.).
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May 1, 2019
Couple Can Amend Third-Party Claims Against Insurance Agency, Judge Rules
NEW ORLEANS — A couple accused by their insurer of misrepresenting information on their application for a homeowners policy can amend their third-party complaint against the agency that obtained the policy, a federal judge in Louisiana ruled April 29 in denying the agency’s motion to dismiss, finding that the couple should be allowed to remedy deficiencies in their allegations for breach of contract, negligence and detrimental reliance (GeoVera Specialty Insurance Co. v. Mariette Joachin, et al., No. 18-7577, E.D. La., 2019 U.S. Dist. LEXIS 71661).