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

Mealey's Insurance Fraud

December 06, 2023
GEICO Seeks Default In $1.8M PIP Fraud Suit Against Doctors, Pain Clinic

NEWARK, N.J. — GEICO on Dec. 5 moved for a clerk’s entry of default in a New Jersey federal court after a doctor and his medical practice failed to respond to GEICO’s complaint alleging that they participated in a “complex fraudulent scheme” with other medical practitioners and a pain management practice to submit fraudulent personal injury protection (PIP) billing to GEICO for services that were not performed or not medically necessary, resulting in damages to GEICO of more than $1.8 million.
December 05, 2023
Insurer Granted Default Judgment In Row With Car Renter Who Lied About Coverage

LAS VEGAS — A Nevada federal judge granted default judgment to an auto insurer for a rental car company in its suit against a woman who rented a car from the company, her unauthorized driver and the person whose car he hit, finding that default judgment “is warranted” for a breach of condition precedent claim but that claims for misrepresentation, unauthorized use of a rental car and declaratory relief limiting recovery are dismissed.
December 04, 2023
Judge Allows Insurers To Amend To Add Fraud Defense For Pre-Hurricane Damage

NEW YORK — A New York federal judge on Dec. 1 issued an order granting a motion to amend an answer in a breach of contract suit filed against a commercial property insurer and an insurance syndicate over their failure to cover a condominium’s hurricane-related losses, finding that the proposed fraud defenses were sufficiently pleaded after discovery revealed that the alleged hurricane-related damage purportedly occurred before the hurricane.
December 04, 2023
Michigan Panel Affirms Order Granting Judgment To Auto Insurer In No-Fault Dispute

DETROIT — A Michigan appeals court affirmed a lower court’s ruling granting summary disposition to an auto insurer in a woman’s suit seeking no-fault benefits from the insurer, finding that the lower court did not err when granting summary disposition to the insurer due to the false statements the woman made on her application for no-fault benefits.
November 30, 2023
Judge Rules On Discovery Request In FCA Suit Alleging Medicare Advantage Fraud

TAMPA, Fla. — A Florida federal judge on Nov. 29 granted in part a relator’s motion to compel discovery in a qui tam suit brought on behalf of the federal government, alleging that medical providers and Medicare Advantage (MA) insurers violated the federal False Claims Act (FCA) by conspiring together to increase risk adjustment scores of MA patients to obtain more federal funding than was owed, finding that because the fraud examples provided in the complaint do not show a purported scheme from 2014 continuing after 2020, discovery is limited to ending on the last day of 2020.
November 30, 2023
Judge Refuses To Reconsider Ruling Allowing Law Firm To Intervene In D&O Dispute

SAN JOSE, Calif. — A federal judge in California refused to reconsider its Nov. 3 ruling that granted a law firm’s motion to intervene in an insurer’s lawsuit seeking a declaration that a directors and officers employment practices liability and fiduciary liability policy is rescinded because of the insureds’ material misrepresentations, standing by its decision to permit the firm to enforce a charging lien against the proceeds of the policy.
November 29, 2023
Judge Dismisses FCA Claim In Whistleblower Suit Against Medicare Plan Seller

ALLENTOWN, Pa. — A Pennsylvania federal judge dismissed in part a former employee’s suit claiming wrongful termination in violation of the federal False Claims Act (FCA), the Pennsylvania Whistleblower Law (PWL) and common-law wrongful discharge, finding that while the former employee “failed to plead any underlying FCA violation” against his former employer, a company selling Medicare plans, his claims for violations of the PWL and common-law wrongful discharge were sufficiently pleaded and are therefore not dismissed.
November 29, 2023
Judge Denies Hospital’s Dismissal Motion In FCA Suit Over COVID Testing Scheme

CHICAGO — An Illinois federal judge denied dismissal motions filed by a hospital, the administrator of its lab and the lab’s medical director and affiliated company in a relator’s qui tam suit alleging that they violated the federal False Claims Act (FCA) and Illinois state laws by submitting for reimbursement to government insurers claims for unnecessary testing for COVID-19 and other unrelated conditions, finding that the relator “plausibly alleged materiality” regarding the purported “overbilling scheme.”
November 28, 2023
Michigan Panel Affirms Summary Disposition In PIP Fraud Case Involving Uber Driver

DETROIT — A Michigan appellate court affirmed a lower court’s grant of summary disposition to an insurer in its insured Uber driver’s suit seeking no-fault benefits after he was purportedly injured in an auto accident, finding that summary disposition was an appropriate remedy after the lower court correctly rescinded the insurance policy due to the insured’s denial in his insurance application that he was using the vehicle for a fee.
November 27, 2023
Unsecured Creditors Propose Liquidation Plan For Vesttoo And Its Affiliates

WILMINGTON, Del. — The Official Committee of Unsecured Creditors has proposed a Chapter 11 plan of liquidation for the jointly administered cases of Vesttoo Ltd. and 48 affiliates in Delaware federal bankruptcy court, with a Dec. 13 objection deadline.
November 22, 2023
11th Circuit Sends Questions To Florida High Court In GEICO Repair Act Fraud Suit

ATLANTA — The 11th Circuit U.S. Court of Appeals certified to the Florida Supreme Court questions regarding whether violations of the Florida Motor Vehicle Repair Act prevent a repair shop from receiving payment from an insurance company in GEICO’s second appeal of a district court’s order granting summary judgment to a windshield repair shop and its owners, finding that certification is necessary because “[t]he questions presented are sufficiently unsettled, important, and likely to recur.”
November 21, 2023
Dismissal Denied In FCA Suit Against Maker Of Alleged Defective Knee Replacements

TUSCALOOSA, Ala. — An Alabama federal judge on Nov. 20 denied a motion to dismiss and for judgment on the pleadings by an orthopedic device manufacturer in relators’ suit asserting that the manufacturer violated the federal False Claims Act (FCA) by submitting for reimbursement to government health care programs claims for knee replacement devices it knew were defective, finding that the manufacturer’s argument that the court lacks jurisdiction due to the unconstitutionality of provisions of the FCA “lack[s] merit.”
November 21, 2023
Suit Claiming Skilled Nursing Facilities Violated FCA Tossed After Parties Settle

LOS ANGELES — A California federal judge dismissed the government’s claims against six skilled nursing facilities (SNFs), their owner and their management company two days after the U.S. Department of Justice announced that it entered into a $45.6 million consent judgment with the SNFs and related parties in a suit alleging that they violated the federal False Claims Act (FCA) and California False Claims Act in submitting false claims to Medicare by paying kickbacks to physicians in exchange for the physicians referring patients to the SNFs.
November 20, 2023
1st Circuit Certifies Appeal In FCA Suit Against Teva Alleging Co-Pay Kickbacks

BOSTON — The First Circuit U.S. Court of Appeals on Nov. 17 granted a petition to appeal filed by Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc., asserting that appeal should be granted due to a “substantial ground for difference of opinion” regarding causation under the Anti-Kickback Statute (AKS) as applied to a district court’s partial summary judgment ruling for the government in its suit alleging that they violated the False Claims Act (FCA) and AKS by using co-pay subsidies as kickbacks when selling a multiple sclerosis (MS) drug.
November 16, 2023
DOJ Announces $45.6M Judgment In FCA Suit Against Skilled Nursing Facilities

WASHINGTON, D.C. — The U.S. Department of Justice (DOJ) on Nov. 15 announced that six skilled nursing facilities (SNFs), their owner and their management company have entered into a $45.6 million consent judgment to resolve allegations that they violated the federal False Claims Act (FCA) and California False Claims Act in submitting false claims to Medicare by paying kickbacks to physicians in exchange for the physicians referring patients to the SNFs.
November 16, 2023
Judgment Denied For Short-Term Health Insurer In $250K Cancer Treatment Dispute

OKLAHOMA CITY — An Oklahoma federal judge denied summary judgment for a short-term health insurer in its insured’s breach of contract suit for rescinding his policy and failing to cover his colon cancer treatment over alleged material misrepresentations in the policy application, finding that questions remain as to the insured’s agreeing to rescission and the reasonableness of the insurer’s conduct in ensuring that the insured received his policy benefits.
November 14, 2023
Conversion Bid Denied, Exclusivity Terminated In Vesttoo Bankruptcy Cases

WILMINGTON, Del. — A Delaware federal bankruptcy judge has denied without prejudice a U.S. trustee’s motion to convert the jointly administered Chapter 11 cases of Vesttoo Ltd. and 48 affiliates to Chapter 7 cases.
November 13, 2023
Insurer’s Suit Seeking To Void Life Policies Dismissed In Incontestability Dispute

SEATTLE — A Washington federal judge issued a minute order dismissing 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 there are no remaining issues because the judge was notified of a settlement in the case.
November 09, 2023
Class Certification Granted In Exchange Act Suit Related To Teva FCA Violations

PHILADELPHIA — A Pennsylvania federal judge granted class certification in a putative class action alleging that Teva Pharmaceuticals Industries Ltd. and its executives violated the Securities Exchange Act by artificially raising the price of its stock and concealing information about the multiple sclerosis drug Copaxone, the subject of a False Claims Act (FCA) suit alleging that Teva engaged in a kickback scheme that increased the price of the drug, finding that the lead plaintiff satisfied the standards for class certification, including numerosity, typicality, commonality and adequacy.
November 08, 2023
Nursing Homes’ Affirmative Defenses Stricken In FCA Suit Over ‘Substandard’ Care

PHILADELPHIA — A Pennsylvania federal judge on Nov. 7 granted in part the U.S. government’s motion to strike affirmative defenses asserted by nursing home defendants’ in a suit asserting common law claims and violations of the False Claims Act (FCA) related to alleged “grossly substandard nursing home services to Medicare and Medicaid beneficiaries,” finding that the affirmative defenses of waiver and ratification and accord and satisfaction are not valid but that the mitigation of damages defense must be stricken only as to the FCA claims and not the common law claims.
November 08, 2023
Debtors In Vesttoo Bankruptcy Cases Note Agreement With Unsecured Creditors

WILMINGTON, Del. — In a Nov. 7 objection to conversion to Chapter 7, Chapter 11 debtors Vesttoo Ltd. and 48 affiliates tell a Delaware federal bankruptcy court that they hope to close on a sale of assets “around December 1” and “if such a sale is not possible or cannot come together in that time frame . . . will have worked with [the Official Committee of Unsecured Creditors] toward a singular liquidating plan.”
November 07, 2023
Judgment Granted To Nationwide In Truck Theft Row Over Insured’s Misrepresentation

SCRANTON, Pa. — A Pennsylvania federal judge granted summary judgment to Nationwide in a breach of contract and bad faith suit over Nationwide’s failure to cover an auto insurance claim when its insured’s truck was purportedly stolen and burned, finding that because the insured failed to show that “Nationwide lacked a reasonable basis in denying his claim” due to the insured’s purported material misrepresentations, summary judgment is appropriate.
November 07, 2023
Judge Allows Law Firm To Intervene To Enforce Lien Against D&O Policy Proceeds

SAN JOSE, Calif. — A federal judge in California granted a law firm’s motion to intervene in an insurer’s lawsuit seeking a declaration that a directors and officers employment practices liability and fiduciary liability policy is rescinded because of the insureds’ material misrepresentations, permitting the firm to enforce a charging lien against the proceeds of the policy.
November 06, 2023
6th Circuit Affirms Order Granting Judgment To Hospital In FCA Retaliation Dispute

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a district court’s order granting summary judgment to a hospital and denying as moot a motion to disqualify opposing counsel in a surgeon’s suit alleging violations of the False Claims Act (FCA) related to the hospital’s purported retaliation against him, finding that while the district court should have first ruled on the motion to disqualify before ruling on summary judgment, “remand is not required” because the surgeon failed to file the motion to disqualify on time.
November 06, 2023
Judge Dismisses Claims Against Relator Related To Legal Advice In FCA Billing Suit

ATLANTA — A Georgia federal judge dismissed in part counterclaims against a relator in her federal False Claims Act (FCA) suit against a durable medical equipment (DME) company and its manager alleging that they fraudulently billed the U.S. government for DME that was medically unnecessary, finding that counterclaims for negligence per se and breach of fiduciary duty regarding the relator’s alleged unlicensed practice of law fail to show harm.