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

Mealey's Insurance Fraud

August 07, 2023
Health System Urges Magistrate Not To Reopen ‘Long-Deceased’ FCA Suit

NEW YORK — A state health system urged a New York federal magistrate judge not to grant a whistleblower physician’s motion to reopen a federal and state false claims act violations suit alleging fraudulent Medicare and Medicaid billing by the health system, asserting that there is no evidence that the alleged misconduct “deceived the Court” in the “long-deceased” case.
August 07, 2023
Vacatur Of $122M Arbitration Award Denied In Insurance Fraud Suit Over Drug Pricing

LOUISVILLE, Ky. — A Kentucky federal judge on Aug. 4 denied Rite Aid’s request to vacate a $122,564,346 arbitration award against Rite Aid in Humana’s suit seeking to confirm the award, finding in part that the arbitrator did not disregard the law related to claims against Rite Aid for breach of contract and fraud regarding its usual and customary (U&C) pricing.
August 04, 2023
9th Circuit Reverses FCA Dismissal, Says Public Disclosure Bar ‘Not Triggered’

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals on Aug. 3 reversed and remanded an order dismissing a relator’s qui tam suit alleging violations of the federal False Claims Act (FCA) against pharmaceutical companies related to their alleged fraud by artificially inflating drug prices, finding that the suit was not precluded by the public disclosure bar because none of the public disclosures “made a direct claim” that the pharmaceutical companies committed fraud.
August 02, 2023
Motion To Compel Discovery Of Communications Granted In FCA Suit Against Medtronic

KANSAS CITY, Kan. — A Kansas federal magistrate judge granted Medtronic and its related company’s motion to compel discovery in a relator’s qui tam suit alleging that they violated the federal 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 requested communications are relevant and not privileged.
August 01, 2023
11th Circuit Affirms Order Granting Intervention In FCA Suit Against Pharmacy

ATLANTA — The 11th Circuit U.S. Court of Appeals on July 31 affirmed a district court order granting the U.S. government’s motion to intervene and dismiss a qui tam suit alleging that a pharmacy and its owners participated in a scheme to submit fraudulent claims for payment to federally funded health care programs in violation of the federal False Claims Act (FCA), finding that the government “gave good grounds” for seeking to dismiss the suit after it had earlier declined to intervene.
August 01, 2023
Summary Judgment On False Claims Act Counts Disputed In Crop Insurance Case

YAKIMA, Wash. — Opposing the government’s bid for summary judgment on counts asserted under the False Claims Act (FCA), a farmer argues in Washington federal court that the crop insurance row “stems from an essential misunderstanding of facts by the Plaintiff and conflation of various entities with” his “personal involvement.”
July 31, 2023
Dismissal Recommended In Wells Fargo Row With Insurer Over Possible STOLI Policies

GREENSBORO, N.C. — A North Carolina federal magistrate judge on July 28 recommended dismissing a suit filed by Wells Fargo Bank against an insurer, seeking a judgment as to validity of certain life insurance policies, finding that the court lacks jurisdiction because the complaint fails to show that the insurer is more likely to challenge the policies at issue as stranger-oriented life insurance (STOLI) policies “than any other life insurance policy it has issued.”
July 28, 2023
7th Circuit Remands, Applies FCA ‘Proper Scienter Standard’ Clarified By SCOTUS

CHICAGO — The Seventh Circuit U.S. Court of Appeals on July 27 vacated the judgments of a district court and remanded “in light of the U.S. Supreme Court’s clarification” regarding scienter and the high court’s finding that knowledge of submitting claims for pricing that was not usual and customary sufficed to show scienter in consolidated cases against pharmacies accused of fraudulently overcharging Medicare, Medicaid and the Federal Employee Health Benefits Program for prescription drugs in violation of the False Claims Act (FCA).
July 28, 2023
Judge Tosses Count For State False Claims In Pharmacist’s Suit Against Hospital

HAMMOND, Ind. — An Indiana federal judge granted a hospital’s motion to dismiss its former pharmacist’s allegations of state false claims and whistleblower protection law violations, finding that the pharmacist who alleged that she was fired due to her refusal to unlawfully participate in a federal drug discount program failed to show a connection between the hospital’s participation in the program and the state’s Medicaid program.
July 26, 2023
Reconsideration Of Report On Property Attachment Denied In No-Fault Fraud Dispute

BROOKLYN, N.Y. — A New York federal magistrate judge in a July 25 text-only order on the docket denied a billing company owner’s request to reconsider a report recommending prejudgment attachment of the owner’s property up to $576,040.41 in GEICO’s suit alleging fraudulent billing for unnecessary medical treatment for no-fault accident victims, finding that the owner failed to provide any new evidence or show errors in the court’s reasoning to justify reconsideration.
July 25, 2023
Texas High Court Accepts Certified Question As To TPPCA In Tornado Coverage Dispute

AUSTIN, Texas — The Texas Supreme Court accepted 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), agreeing to answer whether an insurer’s payment of a full appraisal award for tornado damage plus any possible statutory interest bars the insured’s recovery of attorney fees.
July 25, 2023
Judge Denies Judgment For Medical Practice In Fired ENT’s FCA Retaliation Suit

GRAND RAPIDS, Mich. — A Michigan federal judge denied a medical practice’s motions for partial summary judgment in a breach of employment agreement suit filed against it by a former employee, an ear, nose and throat specialist (ENT), finding moot his claim for disability retaliation but that fact questions remain as to alleged violations of the federal False Claims Act (FCA) regarding Medicare fraud.
July 24, 2023
Insurer, Insured Stipulate To Dismissal In Classic Car Policy Coverage Dispute

DENVER — An insurer and its insured stipulated to dismissal of claims against each other in a Colorado federal court regarding alleged material misrepresentations the insured made in procuring a classic car insurance policy and the insurer’s denial of coverage for the insured’s allegedly stolen cars.
July 24, 2023
Magistrate Allows Insurer To Add Overpayment Claim In Hurricane Coverage Row

NEW ORLEANS — A Louisiana federal magistrate judge granted an insurer’s motion to add a counterclaim in homeowners’ suit against the insurer to recover alleged hurricane-related damages, finding “no substantial reason” to deny the motion to add a counterclaim for overpayment based upon the homeowners’ alleged material misrepresentations.
July 20, 2023
Judge Awards Low End Of Penalties In Libby, Mont., Asbestos Diagnosis Case

MISSOULA, Mont. — The federal judge in Montana overseeing the False Claims Act (FCA) dispute between a railroad and the provider of medical care under a special provision of the Patient Protection and Affordable Care Act (ACA) said $2,582,228 in statutory penalties, while at the low end of the permissible range, were sufficient to curtail “reckless disregard for proper medical procedure.”
July 19, 2023
Judge Rules On Judgment Motions In FCA Suit Against Teva Over Co-Pay Kickbacks

BOSTON —A Massachusetts federal judge “allowed” the government’s motion for partial summary judgment in its suit alleging that Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc. violated the False Claims Act (FCA) and Anti-Kickback Statute (AKS) by using co-pay subsidies as kickbacks when selling a multiple sclerosis (MS) drug, finding in part that violating the “AKS is per se material” for claims under the FCA.
July 13, 2023
5th Circuit Certifies Question In Tornado Coverage Dispute To Texas High Court

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on July 12 certified a question to the Texas Supreme Court in an insured’s lawsuit alleging that its insurer violated the Texas Prompt Payment of Claims Act (TPPCA), asking the state’s highest court whether an insurer’s payment of a full appraisal award for tornado damage plus any possible statutory interest bars the insured’s recovery of attorney fees.
July 12, 2023
New York Care Homes Respond To $83M Medicare Fraud Suit Seeking Injunction, Order

NEW YORK — After New York Attorney General Letitia James sued multiple nursing homes and their owners and operators in New York state court alleging fraud and illegal misuse of more than $83 million in Medicare and Medicaid funds, the respondents urged the court to reject the her request for a preliminary injunction requiring them to pay for two monitors to control the nursing homes’ operations, which they claim does not meet the “heightened standard” for injunctive relief.
July 11, 2023
Judge Rules On Dismissal Motion In Insurer’s $2.6M PIP Fraud Suit Against Clinics

NEWARK, N.J. — A New Jersey federal judge dismissed without prejudice in favor of arbitration claims for fraud and unjust enrichment in two insurers’ suit against chiropractic clinics to recover actual damages of more than $2.6 million in personal injury protection (PIP) benefits the insurers paid to the clinics, finding that the fraud “and unjust enrichment claims fall within the purview” of the no-fault law’s arbitration provision.
July 11, 2023
Whistleblower Seeks To Vacate Dismissal In FCA Suit Alleging Medicare Fraud

NEW YORK — One day after a New York federal magistrate judge issued an order granting a whistleblower physician permission to do so, the whistleblower moved to reopen a case dismissed by stipulation, asserting that he discovered new evidence in his federal and state false claims act violations suit against his former employer, a New York state health system, for alleged fraudulent billing to Medicare and Medicaid.
July 11, 2023
Subpoenas Issued In $9.8M Life Policy Row Related To Alleged Fraudulent Birthdate

NEW YORK — A New York federal judge granted a securities intermediary’s request to subpoena federal and state agencies in its breach of contract suit against a life insurer for failure to pay a $9.8 million death benefit, finding that the insured’s actual birthdate is “relevant” to the denial of coverage regarding the insured’s alleged fraud as to “misstatement of age.”
July 07, 2023
Washington High Court Issues Final Ruling On Insurer’s Incontestability Challenge

OLYMPIA, Wash. — The Washington Supreme Court denied a beneficiary’s motion for reconsideration and issued its final opinion in 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 while incontestability does not bar claims for fraud or lack of an insurable interest, the incontestability clause bars claims for lack of capacity that makes a contract “voidable rather than void.”
July 07, 2023
Pennsylvania Panel Says Nonrenewal Of Homeowners Policy Violated Insurance Law

HARRISBURG, Pa. — A Pennsylvania appellate court on July 6 issued an order to publish its opinion affirming a Pennsylvania insurance commissioner’s decision that an insurer’s cancellation and nonrenewal of a homeowners policy violated the Pennsylvania Unfair Insurance Practices Act, finding that the nonrenewal notice failed to comply with the act and that there was no material misrepresentation to justify policy cancellation.
July 06, 2023
Federal Judge Denies Interpleader In Coverage Dispute Over D&O Policy

SAN JOSE, Calif. — A California federal judge denied an insurer’s motion to amend a complaint to add an interpleader in its suit seeking a declaration that a directors and officers (D&O) insurance policy is rescinded because of the insureds’ material misrepresentations or a declaration that it has no duty to indemnify or defend in an underlying action, finding that allowing an interpleader “would be both futile and prejudicial.”
July 05, 2023
Judge Grants Default For Insurer, Says Insured Didn’t Disclose ‘Material Changes’

TAMPA, Fla. — A Florida federal judge on July 3 adopted a magistrate judge’s report and recommendation to grant default judgment and enter a declaratory judgment for the insurer in a suit against its insured, the driver and an injured passenger from another vehicle, finding that the insurer has no duty to defend, cover or indemnify its insured in an underlying suit related to a March 2021 accident because the insured failed to notify the insurer of “material changes” such as her change of address.