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

Mealey's Insurance Fraud

April 10, 2023
Relators Urge High Court To Reverse 7th Circuit In FCA Suit Against Pharmacies

WASHINGTON, D.C. — Whistleblowers in consolidated qui tam actions on April 7 filed a reply brief with the U.S. Supreme Court, urging reversal of the Seventh Circuit U.S. Court of Appeals’ decisions affirming judgments for pharmacies in cases alleging that the pharmacies were fraudulently overcharging Medicare, Medicaid and the Federal Employee Health Benefits Program (FEP) for prescription drugs in violation of the False Claims Act (FCA).
April 06, 2023
Judge Grants Clinic Owner’s Motion To Stay In Suit Over Fraudulent Billing

DETROIT — A Michigan federal judge granted in part a temporary stay pending appeal of an order requiring the owner of medical clinics alleged to have orchestrated a fraudulent no-fault billing scheme to dismiss a qui tam action against an insurer.
April 06, 2023
Texas Lab Agrees To Pay $5.9M In FCA Suit Over Unneeded Tests Billed To Medicare

BRUNSWICK, Ga. — The U.S. government and a qui tam relator stipulated to dismissal of their claims against a Texas lab after it agreed to pay at least $5.9 million to settle a suit alleging that the lab paid commissions to independently contracted marketers in violation of the Anti-Kickback Statute (AKS) and False Claims Act (FCA) and submitted for payment claims for unnecessary testing to federal government health care programs.
April 05, 2023
Justice Thomas Rejects Stay Of 11th Circuit Mandate In Care Home Fraud Case

WASHINGTON, D.C.— U.S. Supreme Court Justice Clarence Thomas on April 4 denied an application to stay the 11th Circuit U.S. Court of Appeals’ mandate pending a decision on a man’s upcoming petition for a writ of certiorari of the 11th Circuit’s ruling that a district court did not err in admitting expert opinion testimony against the man convicted for his role in a $37 million health care fraud scheme that began in 1998 and involved bribing physicians to have patients entered into a network of assisted living facilities and skilled nursing facilities that he owned.
April 04, 2023
Judgment Recommended For Insurer Due To Insured’s ‘Material Misrepresentations’

BROOKLYN, N.Y. — A New York federal magistrate judge on April 3 issued a report recommending that the court grant an underwriter and insurer’s declaratory judgment motion that a limited liability company cannot qualify as an additional insured and that the insurer and underwriter have no duty to defend in an underlying negligence lawsuit because the insured made alleged “material representations” in its insurance application regarding the contract between the company and the insured.
April 04, 2023
7th Circuit Affirms, Deems Failure To Disclose Cancer ‘Material Misrepresentation’

CHICAGO — The Seventh Circuit U.S. Court of Appeals affirmed a district’s court judgment for a life insurer in a suit filed against it by the wife of a man who died from lung cancer, finding that the man’s failure to disclose to the insurer his terminal cancer diagnosis discovered after he applied for the policy but prior to its issuance constituted a “material misrepresentation” that permitted the insurer to rescind the policy.
April 03, 2023
Dismissal Denied In FCA Suit Against Nursing Homes With Claims ‘Adequately Pled’

PHILADELPHIA — A Pennsylvania federal judge on March 31 denied nursing home defendants’ dismissal motion in the U.S. government’s suit against them asserting common-law claims of payment by mistake and unjust enrichment and a False Claims Act (FCA) claim related to alleged “grossly substandard nursing home services to Medicare and Medicaid beneficiaries,” finding that the allegations for common-law claims “are adequately pled” and the FCA claim rises “to the level of gross-negligence necessary to deem [the nursing homes’] services worthless.”
March 31, 2023
Amici To High Court: Misinterpreting Medicare ‘Ambiguous Law’ Not FCA Fraud

WASHINGTON, D.C. — Multiple amici curiae that filed briefs in support of respondent pharmacies argue that misinterpreting an ‘ambiguous law’ is not fraud in whistleblowers’ qui tam actions asking the U.S. Supreme Court to overturn the Seventh Circuit U.S. Court of Appeals’ decisions affirming judgments for pharmacies in consolidated cases alleging that the pharmacies were fraudulently overcharging Medicare, Medicaid and the Federal Employee Health Benefits Program (FEP) for prescription drugs in violation of the False Claims Act (FCA).
March 29, 2023
Convicted Defendants Must Pay $113.4M In FCA Violation Suit Over Medicare Claims

CORPUS CHRISTI, Texas — After a Texas federal judge ordered two convicted defendants to pay $113,467,410 to the U.S. government for violations of the federal False Claims Act (FCA) in connection with a Medicare “health care fraud conspiracy,” the judge on March 28 issued an order requiring the government and the convicted defendants to file with the court “appropriate dismissal documents.”
March 27, 2023
All FCA Claims Dismissed Against Care Homes For ‘Little Substance’ In Allegations

BIRMINGHAM, Ala. — An Alabama federal judge dismissed all claims against all defendants in a qui tam suit filed against a physician, psychiatric practice and nursing home facilities, alleging violations of the False Claims Act (FCA) and the Anti-Kickback Statute (AKS) through fraudulent billings to Medicare and Medicaid, finding that the allegations in the second amended complaint (SAC) have “little substance to them” and provide “[v]ery little, if any, factual detail regarding the alleged violations.”
March 24, 2023
Parties To Libby, Mont., Asbestos Case Call Government Testimony Critical

MISSOULA, Mont. — Agents of the United States are the only ones capable of answering questions critical to a False Claims Act (FCA) case involving asbestos-related Medicare claims created under the Patient Protection and Affordable Care Act (ACA), parties to the suit told a federal judge in Montana, urging him to affirm a decision that the government must produce witnesses and to ignore a motion for reconsideration.
March 23, 2023
Judge Rules On Dismissal Motions In Row Over Insurance Coverage In Apartment Fire

TOLEDO, Ohio — An Ohio federal judge granted in part a commercial insurer’s motion to dismiss a counterclaim against it in a declaratory judgment suit against its insured over policy rescission after a fire occurred at the insured’s building, finding that the breach of contract, bad faith, declaratory judgment and two agency counterclaims should not be dismissed because the facts are sufficiently pleaded but that the counterclaim regarding agency of the underwriting surveyor should be dismissed because the survey was completed after the policy was issued.
March 22, 2023
Del. High Court Rules On STOLI Policy Row, Says Buyer Can’t Collect Death Benefits

NEW CASTLE, Del. — The Delaware Supreme Court affirmed in part a lower court’s determination that a securities intermediary and purchaser of stranger originated life insurance (STOLI) policies could not recover death benefits for those illegal policies but reversed and remanded the lower court’s decision ordering return of premiums and denying prejudgment interest, finding that the lower court failed to apply the Supreme Court’s “STOLI precedents” when addressing the claims for premiums and interest.
March 20, 2023
U.S. High Court Grants Government’s Oral Argument Bid In FCA Medicare Drug Cases

WASHINGTON, D.C. — The U.S. Supreme Court on March 20 granted, in part, U.S. Solicitor General Elizabeth B. Prelogar’s motion to participate in oral argument as amicus curiae in support of whistleblowers in their qui tam actions asking the U.S. Supreme Court to overturn the Seventh Circuit U.S. Court of Appeals’ decisions affirming judgments for pharmacies in consolidated cases alleging that the pharmacies were fraudulently overcharging Medicare, Medicaid and the Federal Employee Health Benefits Program (FEP) for prescription drugs.
March 17, 2023
Judgment Denied In Hurricane Coverage Suit Involving Facebook Donation Request

NEW ORLEANS — A Louisiana federal judge on March 16 denied an insurer’s motions to confirm an appraisal award and for summary judgment in a coverage dispute over hurricane damage at the insured’s nonprofit ranch for teenage boys, finding that award confirmation is denied because the insurance contract identifies the appraisal as nonbinding and that fact issues remain regarding the insured’s purported damage misrepresentation “even assuming” that the reduced donation request on its “Facebook post is competent summary judgment evidence.”
March 17, 2023
Judge Grants Judgment For Homeowners Insurer In Coverage Dispute Over Fire Loss

LOS ANGELES — A California federal judge granted a homeowners insurer’s motion for summary judgment in a suit filed against it by a homeowner alleging breach of contract after the insurer denied coverage for a fire loss, finding that the insurer is entitled to rescind the policy based upon the homeowner’s material misrepresentations.
March 16, 2023
Cross-Claim Filed Against Co-Defendant In GEICO’s Fraud Suit Against Psychologists

BROOKLYN, N.Y. — A psychologist on March 15 filed answers to GEICO’s complaint against him and a cross-claim against a co-defendant in a no-fault insurance fraud and Racketeer Influenced and Corrupt Organizations Act (RICO) violation suit against the psychologist and others, asserting that they participated in a fraudulent scheme to provide kickbacks for referrals and submit for reimbursement claims for services that did not occur or were not medically necessary.
March 15, 2023
Magistrate Grants Dismissal In FCA Qui Tam Suit, Says Relator Not Original Source

SAN FRANCISCO — A California federal magistrate judge granted dismissal to pharmaceutical companies in a qui tam suit filed against them by a relator asserting that the companies misled the U.S. Patent Office into issuing invalid drug patents that allowed the companies to overcharge the federal government and states under certain programs, including Medicare and Medicaid, finding that the relator does not qualify as an original source under the federal False Claims Act (FCA) and that his claims “are therefore barred under the public disclosure bar.”
March 14, 2023
U.S. Intervenes In Rite Aid False Claims Suit For Filling Suspect Opioid Scripts

CLEVELAND — Following through on a judge’s January order, the United States on March 13 filed a complaint-in-intervention in a false claims lawsuit alleging that Rite Aid Corp. pharmacies filled “unlawful and medically unnecessary” prescriptions for opioids and other abuse-prone drugs.
March 14, 2023
Amendment, Dismissal For Failure To Prosecute Both Denied In Fraud Suit

WILMINGTON, Del. — In a case concerning an alleged scheme to transfer funds from a reinsurance trust to affiliated entities and “highly volatile hedge funds,” a Delaware Chancery Court vice chancellor on March 13 denied both the plaintiffs’ motion to file a fourth amended complaint and defendants’ motion to dismiss the lawsuit for failure to prosecute.
March 14, 2023
CVS’s Dismissal Motion Denied In FCA Claim Over Medicare ‘Anti-Competitive Scheme’

PHILADELPHIA — A Pennsylvania federal judge denied in part CVS and its related entities’ motion to dismiss a qui tam suit against them asserting that they “engaged in an anti-competitive scheme to block Medicare Part D recipients from accessing less expensive drugs” in violation of the False Claims Act (FCA), finding that the complaint suffices to show “the existence of an agreement to violate the FCA.”
March 13, 2023
United States Seeks Reconsideration Of Libby, Mont., Asbestos Deposition Ruling

MISSOULA, Mont. — The United States has asked for leave to file a motion for reconsideration, telling a federal judge in Montana that having two agencies appear for deposition in a dispute over fraud claims stemming from asbestos-related Medicare claims related to Libby, Mont., would require marshalling numerous individuals from several different agencies and asking them to duplicate already performed work without any likelihood of producing relevant evidence.
March 08, 2023
Judgment Granted For Insurer, Voiding Policy For Coverage In Underlying Suits

DETROIT — A Michigan federal judge granted an insurer’s motion for summary judgment in its suit seeking to enforce rescission of an auto insurance policy voided in another declaratory judgment suit as to a child care center’s insured vehicle involved in an accident, finding that the policy does not provide coverage for those entities suing the insurer in underlying state court suits and seeking reimbursement for purported medical services provided under an assignment of rights.
March 08, 2023
Judge Seeks Remaining Issues After $43M Verdict Against Eyecare Firm In FCA Suit

ST. PAUL, Minn. — A Minnesota federal judge entered a text order directing parties to raise any remaining issues before entry of judgment after a six-week trial concluded with a jury returning a verdict of more than $43 million against an ophthalmic supply company and its owner for violations of the False Claims Act (FCA) and Anti-Kickback Statute related to kickbacks paid to eye surgeons to use the company’s products for cataract surgeries paid for by Medicare.
March 07, 2023
Dismissal Recommended In Glucose Monitor FCA Suit Alleging Doctor Kickbacks

SAN ANTONIO — A Texas federal magistrate issued a report and recommendation advising dismissal of a former employee’s qui tam suit brought under the federal False Claims Act (FCA) and Texas Medicaid Fraud Prevention Act (TMFPA) against a company selling continuous glucose monitoring systems, finding that the employee’s amended complaint does not sufficiently allege the company’s involvement in a fraudulent scheme to submit claims to federal health care insurers “based on illegal kickbacks.”