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

Mealey's Insurance Fraud

November 06, 2023
GEICO Files $1.8M Suit Against Doctor, Pain Clinic Over Fraudulent PIP Claims

NEWARK, N.J. — GEICO filed suit in a New Jersey federal court against doctors and other medical practitioners and their practices, alleging that they participated in a “complex fraudulent scheme” to submit fraudulent personal injury protection (PIP) billing to GEICO for services that were either not performed or not medically necessary, resulting in damages to GEICO of more than $1.8 million.
November 03, 2023
Federal Judge Enters Default Judgment, Voids Yacht Owner’s Maritime Policy

TAMPA, Fla. — A Florida federal judge on Nov. 3 entered a docket-only order directing the court clerk to enter a final default judgment against a yacht owner and void his policy in a maritime insurer’s suit seeking a declaratory judgment that because the owner misrepresented his compliance with recommendations in a yacht survey, the policy is void.
November 02, 2023
Pharma Company Agrees To Pay Up To $50M In FCA Suit Over Medicaid Rebate Dispute

WASHINGTON, D.C. — The U.S. Department of Justice (DOJ) announced that Nostrum Laboratories Inc. and its CEO and founder, Nirmal Mulye, have agreed to pay a minimum of $3,825,000, and up to $50 million based on contingencies such as specified earnings or other payments received, to settle allegations that the company and Mulye violated the False Claims Act (FCA) by underpaying Medicaid rebates to state Medicaid programs covering the drug Nitrofurantoin Oral Suspension (Nitro OS).
November 01, 2023
Dismissal Denied In FCA Suit Filed By Doctor Refusing To ‘Play Ball’ With Provider

TAMPA, Fla. — A Florida federal judge denied dismissal motions filed by a Medicare Advantage organization (MAO) and an independent physician association (IPA) in a physician’s qui tam suit against them alleging violations of the federal False Claims Act (FCA) for his purported refusal to “play ball” to artificially increase patients’ risk assessment scores, finding that the physician credibly alleged that his protected conduct of trying to stop alleged FCA violations resulted in purported retaliation and loss of his patients.
November 01, 2023
8th Circuit Denies Panel Rehearing In Qui Tam Crop Insurance Case

ST. LOUIS — A petition for panel rehearing of a qui tam crop insurance case in which a ruling against relators was upheld has been denied without explanation; in seeking rehearing, the relators argued that the Eighth Circuit U.S. Court of Appeals “overlooked facts in the record” and “misapprehended the import” of United States ex rel. Schutte v. SuperValu Inc.
November 01, 2023
Stay Granted In Insurance Rescission Suit Due To Overlap With Underlying Case

SAN FRANCISCO — A California federal judge granted a stay in an insurer’s suit against its insured and a lessee contracting with the insured for a remodeling project, seeking rescission of policies and a declaratory judgment that there is no duty to defend and indemnify the insured in an underlying negligence suit regarding the remodeling project, finding that factors weigh in favor of a stay, including the overlapping facts in the underlying action and the declaratory judgment suit.
October 31, 2023
Conversion To Chapter 7 Sought For Vesttoo Bankruptcy Cases By U.S. Trustee

WILMINGTON, Del. — A Delaware federal bankruptcy judge on Oct. 30 set a Nov. 8 hearing on a motion to convert the jointly administered Chapter 11 cases of Vesttoo Ltd. and 48 affiliates to Chapter 7 cases.
October 31, 2023
2nd Circuit Affirms Dismissal Of FCA Suit Against Bank For Lack Of Materiality

NEW YORK — The Second Circuit U.S. Court of Appeals on Oct. 30 affirmed a district court’s dismissal of a relator’s qui tam suit brought on behalf of the Federal Deposit Insurance Corp., alleging that a bank violated the False Claims Act (FCA) when it purchased loans from the FDIC but failed to manage the loans to minimize losses to the FDIC, finding that the relator failed to meet the materiality requirements of the FCA.
October 30, 2023
9th Circuit Affirms Judgment In Insurance Fraud Dispute Over Employee’s Status

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals issued a corrected opinion, affirming a district court’s summary judgment for an insurance broker acting as a licensed agent for a health insurer awarded $2.4 million in damages when its insured company was found liable for fraud regarding classifying an employee incorrectly as full time, finding, in part, that the district court correctly determined that the broker did not act outside its agency authority for the health insurer.
October 27, 2023
Physician Appeals $27M Judgment In FCA Suit Over ‘Alternative’ Therapy Billing

ROME, Ga. — A physician and his medical practice provided notice to a Georgia federal court that they are appealing to the 11th Circuit U.S. Court of Appeals a $27,567,729 judgment for violations of the False Claims Act (FCA) related to billing Medicare for use of a chelation therapy drug for “alternative” therapy not covered by Medicare after a jury returned a verdict for the U.S. government, finding that all 4,407 claims submitted for reimbursement violated the FCA.
October 26, 2023
Counsel Advises Of Resolution In Commercial Insurance Dispute Over Fire Loss

WILLIAMSPORT, Pa. — Counsel for a property owner suing his commercial property insurer for breach of contract advised a Pennsylvania federal judge that the owner and insurer had resolved the case 11 days after the judge denied certain motions in limine to exclude evidence of purchase and post-fire sale prices of property where a building burned down and the insurer denied coverage, asserting that the fire was intentional.
October 25, 2023
Insurer’s Motion To Exclude Exhibit Granted As To Waiver In Insurance Coverage Row

DAYTON, Ohio — An Ohio federal judge granted in part an insurer’s motion in limine to exclude an exhibit that includes a homeowners policy endorsement, finding that the homeowners may not use the exhibit to argue that the insurer waived a fraud defense because the insurer acted under the endorsement when refusing to cover the homeowners’ additional living expenses (ALE) claim after discovering the homeowners’ alleged fraudulent conduct.
October 24, 2023
Judgment Granted For Lessee In $2.5M Insurance Fraud Row Involving Chris Brown

MEMPHIS, Tenn. — A Tennessee federal judge on Oct. 23 granted summary judgment to the lessee of a recording studio owned by musician Chris Brown, who was previously found liable for submitting a fraudulent insurance claim for burglary and fire at his studio, finding that claim preclusion prevents the insurer from asserting claims against the lessee, who had received a $2.5 million jury award.
October 20, 2023
Partial Dismissal Granted In FCA Suit Against Suboxone Maker Over False Pricing

ABINGDON, Va. — A Virginia federal judge lifted a stay and granted partial dismissal in a relator’s qui tam suit alleging that a suboxone manufacturer violated the federal False Claims Act (FCA) and state law false claims acts by falsely reporting best price data for Suboxone, finding that the FCA claims of misreporting best price, making false statements and retaliation must be dismissed but that the relator’s conspiracy and reverse false claims may proceed.
October 20, 2023
Default Judgment Recommended In Insurance Policy Breach Suit Against Yacht Owner

TAMPA, Fla. — A federal magistrate judge issued a report and recommendation advising that default judgment should be entered against a yacht owner in a maritime insurer’s suit seeking a declaratory judgment that the owner breached an insurance policy, thereby voiding it, finding that the insurer established that “it is entitled to a declaration that the Policy is void” by showing that the owner misrepresented his compliance with recommendations in a yacht survey.
October 18, 2023
Debtors In Vesttoo Chapter 11 Case Ask Bankruptcy Court To Establish Bar Dates

WILMINGTON, Del. — Vesttoo Ltd. and 48 affiliated entities (collectively, the debtors) have asked a Delaware federal bankruptcy court to set a series of bar dates in their jointly administered Chapter 11 case, starting with a Dec. 1 deadline for nongovernmental entities or individuals to file proof of claims that arose before the debtors filed for bankruptcy.
October 17, 2023
2nd Circuit: No Conversion In Case Of 1st Impression Over FCA Medicare Payments

NEW YORK — In a case of first impression on interlocutory appeal, the Second Circuit U.S. Court of Appeals on Oct. 16 reversed and remanded a district court decision denying dismissal to a parent company and its affiliated hospital and nursing home in a qui tam suit alleging violations of the False Claims Act (FCA) related to submitting Medicare and Medicaid reimbursement claims without disclosing alleged unlawful conversions, finding that federal law is not violated when the recipient of a “payment is under no obligation to utilize the funds in any particular way.”
October 17, 2023
$193M False Claims Act Judgment Against Lilly Heads To 7th Circuit On Appeal

CHICAGO — Both parties are appealing a final judgment of $193 million against Eli Lilly & Co. stemming from a False Claims Act jury verdict, with the relator and Lilly suggesting in a joint status report that the Seventh Circuit U.S. Court of Appeals consolidate the proceedings.
October 16, 2023
High Court Won’t Review FCA Suit Alleging Fraudulent Compliance With HUD Rules

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 16 denied a former underwriter’s petition for a writ of certiorari seeking review and reversal of a Seventh Circuit U.S. Court of Appeals’ determination that she failed to show that a lender’s alleged violations of the federal False Claims Act (FCA) caused harm to the U.S. Department of Housing and Urban Development.
October 12, 2023
After 8th Circuit Upholds Ruling In Qui Tam Case, Relators Seek Panel Rehearing

ST. LOUIS — Arguing that an Eighth Circuit U.S. Court of Appeals panel “overlooked facts in the record” and “misapprehended the import” of United States ex rel. Schutte v. SuperValu Inc., relators asked the panel to rehear the qui tam crop insurance case in which a ruling against them was upheld.
October 11, 2023
Washington Panel Affirms Order Denying Surgery In Row Over Workers’ Comp Benefits

SEATTLE — A Washington state appellate court affirmed a lower court order upholding the state Board of Industrial Insurance Appeals’ (BIA) reversal of a Washington Department of Labor (DOL) decision to authorize and pay for surgery related to a man’s purported workplace injury, ruling that the lower court “did not exceed the scope of its review” when entering findings related to the man’s willful misrepresentation.
October 10, 2023
Summary Judgment Granted For GEICO In $3.8M No-Fault Insurance Fraud Suit

MIAMI — A Florida federal judge adopted a magistrate judge’s report and recommendation, granting in part GEICO’s summary judgment motion in a fraud and Racketeer Influenced and Corrupt Organizations Act (RICO) suit filed against a rehabilitation facility, its medical director and related entities, finding that summary judgment for GEICO is appropriate as to its claims related to the medical director’s supervision over health care services at a specified facility.
October 10, 2023
Certiorari Denied In Man’s Bid For Review Of His Insurance Fraud Conviction

WASHINGTON, D.C. — The U.S. Supreme Court on Oct. 10 denied a petition for a writ of certiorari filed by a man seeking review of his insurance and tax fraud convictions who said the issuance of a search warrant resulting in his conviction lacked probable cause and violated his rights under the Fourth Amendment to the U.S. Constitution.
October 06, 2023
Magistrate Denies Relator’s Bid To Reopen Discovery In FCA Suit Against Medtronic

KANSAS CITY, Kan. — A Kansas federal magistrate judge on Oct. 5 denied a relator’s request to reopen discovery in his qui tam suit alleging that Medtronic and its related company and a hospital violated the False Claims Act (FCA) by participating in a scheme to provide medically unnecessary treatment resulting in the submission of false claims for payment to federal health care programs, finding that the relator failed to establish good cause to reopen discovery.
October 04, 2023
Judge: First-To-File Bar Inapplicable In FCA Suit Against Skilled Nursing Homes

PHILADELPHIA — A Pennsylvania federal judge denied a motion to dismiss by a therapy service provider and its contracted skilled nursing facilities (SNFs) in a qui tam suit filed against them alleging violations of the False Claims Act (FCA) when they purportedly billed Medicare and Medicaid for unnecessary services, finding that because the suit adds materially to a prior qui tam suit filed against the service provider, the first-to-file rule does not apply to bar the more recent claims.