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

Mealey's Insurance Fraud

February 14, 2024
Judge Stays Case, Says Breach Of Contract Claim Must Be Arbitrated In FCA Suit

TAMPA, Fla. — A Florida federal judge stayed a physician’s qui tam suit alleging that a Medicare Advantage organization (MAO) and an independent physician association (IPA) violated the federal False Claims Act (FCA) by artificially increasing patients’ risk assessment scores, finding that an added claim for breach of contract must be arbitrated pursuant to the terms of an agreement between the physician’s practice and the IPA.
February 13, 2024
New Trial Denied But Judgment Cut By $270M In FCA Suit Against Ophthalmic Company

ST. PAUL, Minn. — A Minnesota federal judge reduced a $487,048,705.13 judgment against an ophthalmic company and its owner to $216,675,248.55 in a whistleblower’s qui tam suit alleging violations of the False Claims Act (FCA) and Anti-Kickback Statute (AKS) related to kickbacks paid to eye surgeons to use the company’s products for cataract surgeries paid for by Medicare.
February 12, 2024
11th Circuit Schedules Oral Arguments In Mold Coverage, Bad Faith Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals scheduled oral arguments for April 16 in a mold coverage suit involving an insured’s appeal of a district court’s ruling on breach of contract and bad faith claims and an insurer’s cross-appeal of the district court’s ruling on fraud and conspiracy counterclaims asserted by the insurer.
February 07, 2024
Judge Dismisses FCA Claims Against Rehab Facilities Accused Of Medicare Fraud

PHILADELPHIA — A Pennsylvania federal judge on Feb. 6 dismissed claims against skilled nursing facilities (SNFs) alleged to have violated the federal False Claims Act (FCA) regarding Medicare and Medicaid fraud related to billing for rehabilitative therapy that was purportedly not provided, finding that claims in the amended complaint failed to “cure the deficiencies” of the previous complaint.
February 07, 2024
Judge Denies Reconsideration Of Fees Awarded To Nursing Home In ‘Frivolous’ Action

OXFORD, Miss. — A Mississippi federal judge denied reconsideration of the award of attorney fees to a nursing home in a relator’s qui tam suit alleging violations of the federal False Claims Act (FCA) regarding the nursing home submitting for payment claims to government insurers while employing a nurse whose license was purportedly revoked, finding that “the relator’s action was groundless, frivolous, and had no chance of success.”
February 06, 2024
Judge Denies Dismissal In Estate’s Suit Seeking Benefits Of 2 $5M STOLI Policies

NEW HAVEN, Conn. — A Connecticut federal judge denied dismissal motions filed by a bank acting as securities intermediary for two $5 million stranger-originated life-insurance (STOLI) policies and a limited partnership and beneficial owner of the policies in an estate’s suit seeking to recover death benefits, finding that the estate’s pleadings sufficed to show that the bank acted under the direction of the partnership to maintain the policies for the partnership’s benefit.
February 05, 2024
Judge Adopts Report Advising Attaching Property In $1.395M No-Fault Fraud Suit

BROOKLYN, N.Y. — A New York federal judge on Feb. 2 adopted a magistrate judge’s report and recommendation advising granting GEICO’s motion for prejudgment attachment for property belonging to non-appearing defendants alleged to have used their dissolved corporation to bill GEICO for more than $1,395,000 in “non-reimbursable psychology services” for persons claiming to be injured in auto accidents, finding “no clear error” on the record.
February 05, 2024
Insured Cannot Recover Attorney Fees, Texas High Court Says In Answering Question

AUSTIN, Texas —The Texas Supreme Court on Feb. 2 answered “yes” to a certified question from the Fifth Circuit U.S. Court of Appeals in an insured’s lawsuit alleging that its insurer violated the Texas Prompt Payment of Claims Act (TPPCA), concluding that the TPPCA prohibits the insured from recovering attorney fees because the insurer voluntarily paid the full appraisal award for the insured’s tornado damage plus any statutory interest.
February 05, 2024
Aon Entities Seek Dismissal Of Insurers’ Suit Over Vesttoo Dealings

NEW YORK — Contending in part that the August 2022 announcement of a $1 billion partnership between Vesttoo Ltd. and Clear Blue Insurance Group undercuts the framing of the complaint against them, Aon PLC (Aon) and Aon Insurance Managers (Bermuda) Ltd. have moved in New York state court for dismissal.
February 02, 2024
Judge Sets Date For Change Of Plea After Deal Reached In $38M Care Home Fraud Case

MIAMI — After being advised that a plea agreement had been reached, a Florida federal judge on Feb. 1 issued docket-only orders setting a date for a sentencing and change of plea hearing for a man convicted of fraud, bribery and money laundering in a $38.7 million health care fraud scheme involving bribing physicians to have patients entered into the assisted living and skilled nursing facilities he owned.
February 02, 2024
Judgment Granted For Insurer In Row Over Misrepresentation Of Harassment Suit

SANTA ANA, Calif. — A California federal judge granted summary judgment to an employment practices liability insurer in a declaratory judgment suit against its insured, finding that the insurer is entitled to rescind the policies because it would not have issued the policies had it known of the insured’s false affirmation in the policy application that no harassment suits were made against it in the last five years.
February 02, 2024
Bad Faith, Insurance Code Violation Claims To Proceed Against Homeowners Insurer

MARSHALL, Texas — An insured’s claims for bad faith and violation of the Texas Insurance Code will proceed to trial because questions of fact exist regarding the cause of a fire at the insured’s home and whether the homeowners insurer investigated the claim with the pretext of denying coverage on the basis that the fire was intentionally set by the insured, a Texas federal magistrate judge said in denying the insurer’s motion for summary judgment.
February 02, 2024
Questions Of Fact Exist On Breach Of Contract Claim In Fire Coverage Suit

TOLEDO, Ohio — An insured’s breach of contract claim against a homeowners insurer in a fire coverage dispute will proceed because questions of fact exist regarding the materiality of an insured’s alleged misrepresentations and regarding the insurer’s affirmative defense of arson; however, the insured’s bad faith claim cannot proceed because the insurer’s denial of coverage was not unreasonable, an Ohio federal judge said in partially granting the insurer’s motion for summary judgment.
February 01, 2024
Late Objection Bid Draws Opposition In Vesttoo Chapter 11 Cases

WILMINGTON, Del. — Asserting that “Vesttoo’s defrauded creditors have overwhelmingly voted to accept” a Chapter 11 plan of liquidation for Vesttoo Ltd. and dozens of its affiliates, two creditors are among the entities urging a Delaware federal bankruptcy court to reject a motion to allow an untimely objection to claims against one of the affiliates.
January 31, 2024
Magistrate Recommends Granting Judgment For Insurer In Yacht Fire Coverage Dispute

MIAMI — A Florida federal magistrate judge issued a report and recommendation advising granting summary judgment for a marine insurer seeking a declaratory judgment that it is not obligated to cover its insured’s loss related to fire damage of an 85-foot yacht, finding that because the insured made material misrepresentations in the policy application, the insurer is entitled to a ruling that the policy is void and there is no coverage.
January 30, 2024
9th Circuit Stays Mandate Reversing Court’s Dismissal In FCA Drug Pricing Suit

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals granted a 90-day stay of the mandate reversing and remanding a district court’s dismissal of a relator’s qui tam suit alleging violations of the False Claims Act (FCA) against pharmaceutical companies related to their alleged fraud by artificially inflating drug prices.
January 30, 2024
Judge Overrules Discovery Objections In FCA Suit, Says Scope Should Be Nationwide

SAN DIEGO — A California federal judge affirmed a magistrate judge’s discovery order and overruled Abbott Laboratories’ objections to the geographical scope of discovery in a suit alleging violations of the False Claims Act (FCA) and state false claims laws regarding an alleged kickback scheme to induce hospitals and physicians to use an Abbott cardiac medical device, finding that the complaint sufficiently alleges a “nationwide scheme.”
January 29, 2024
Judgment Entered For Insurer In Dispute Over Insured’s Asserted ‘State Of Health’

MIAMI — A Florida federal judge on Jan. 26 entered a default judgment in an insurer’s suit seeking to rescind a life insurance policy, finding that the insurer is entitled to a declaratory judgment rescinding the policy because of misrepresentations that the insured “was not in the state of health described in her application.”
January 26, 2024
Judgment For Insurer Affirmed In Fire Loss Coverage Dispute Over Misrepresentations

FRANKFORT, Ky. — A Kentucky appellate court affirmed in part a lower court’s grant of summary judgment for an insurer and an insurance agency in a dispute with a homeowner over denial of coverage for a fire, finding that summary judgment was correctly granted for the insurer and agency because of the misrepresentations made in the policy application despite it being completed by an insurance agent and signed by the homeowner.
January 26, 2024
Magistrate: Parties In FCA Suit Must Respond To Intervention By Specific Date

INDIANAPOLIS — An Indiana federal magistrate judge ordered parties to respond by Feb. 5 to the state’s motion to intervene in a suit filed by a health care network’s former employee, who alleges that his termination was in retaliation for his expressing concerns over the network’s purported False Claims Act (FCA) violations by illegally inducing physicians to refer patients to the network’s hospitals.
January 25, 2024
Vesttoo Bankruptcy Debtors: Proceeding In Israel Would Be More Efficient

WILMINGTON, Del. — A variety of objections have been lodged in Delaware federal bankruptcy court regarding the Official Committee of Unsecured Creditors’ Chapter 11 plan of liquidation for Vesttoo Ltd. and 48 affiliates, including one in which the debtors argue that the cases should be dismissed “so that more efficient insolvency proceedings can be filed in Israel.”
January 25, 2024
Summary Judgment Granted For Insurer In Row Over Overvalued Sunken Fishing Boat

FORT LAUDERDALE, Fla. — A Florida federal judge granted summary judgment to a commercial marine insurer seeking a declaratory judgment that it did not need to provide coverage for a fishing vessel it believes was intentionally sunk, finding no remaining issues of material fact that the insured made material misrepresentations in the policy application, including overvaluing the vessel by more than $35,000.
January 24, 2024
Doctors, Practices Seek Denial Of Reconsideration Or Appeal In GEICO’s RICO Suit

TRENTON, N.J. — Doctors and their practices asked a New Jersey federal court to deny GEICO’s motion for reconsideration or interlocutory appeal of the court’s order dismissing in part GEICO’s suit alleging fraudulent billing for unnecessary medical and chiropractic services for people injured in auto accidents and eligible for no-fault coverage.
January 22, 2024
Cert Denied In Hospital’s Challenge To FCA Suit Over False Reports To Medicare

WASHINGTON, D.C. — The U.S. Supreme Court on Jan. 22 denied a hospital’s petition for a writ of certiorari challenging the Fifth Circuit U.S. Court of Appeals’ decision that declined to dismiss a qui tam suit alleging that a hospital and its owners and officers violated the federal False Claims Act (FCA) by submitting false reports for Medicare reimbursement.
January 18, 2024
Committee Seeks To Bar Some Claimants In Vesttoo Cases From Liquidation Vote

WILMINGTON, Del. — The Official Committee of Unsecured Creditors on Jan. 17 asked a Delaware federal bankruptcy court to reclassify 49 disputed claims so the joint provisional liquidators (JPLs) that submitted them can’t vote on the committee’s Chapter 11 plan of liquidation for Vesttoo Ltd. and 48 affiliates.