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

Mealey's Insurance Fraud

May 20, 2025
Judge Grants GEICO’s Motion To Stay Other Suits In RICO Case Against Providers

BROOKLYN, N.Y. — In a suit alleging Racketeer Influenced and Corrupt Organizations Act (RICO) violations against multiple diagnostic imaging providers and related parties, a New York federal judge on May 19 granted GEICO’s motion for a preliminary injunction to stay pending no-fault collection arbitration and state court suits and enjoin the filing of similar actions against GEICO by those providers, finding that pursuant to a recent ruling by the Second Circuit U.S. Court of Appeals, district courts can enjoin state court proceedings.
May 20, 2025
Clerk Issues Summons In Liberty Mutual No-Fault Fraud Suit Against Pharmacies

CENTRAL ISLIP, N.Y. — A New York federal court clerk on May 19 issued a summons to pharmacies and their owners that were sued by Liberty Mutual for alleged Racketeer Influenced and Corrupt Organizations (RICO) Act violations for their purported participation in a no-fault insurance “scheme” to defraud Liberty Mutual by billing it for unnecessary pain-relief products for claimants involved in auto accidents.
May 16, 2025
Connecticut Federal Judge Grants Judgment For LLC In Fire Coverage Row With AIG

BRIDGEPORT, Conn. — A Connecticut federal bankruptcy judge on May 15 granted in part a motion for partial summary judgment filed by a limited liability company seeking a declaratory judgment that property insurer AIG Property Casualty Co. owes a duty to cover fire-related losses for an apartment leased by the company, finding that AIG has a duty to the company to pay its losses regarding the apartment and that AIG failed to show that the company materially misrepresented its ownership.
May 15, 2025
Magistrate Says Judge Should Deny Motion To Set Aside In Allstate RICO Suit

AUSTIN, Texas — A Texas federal magistrate judge issued a report and recommendation advising that a district court judge should deny a motion to set aside a court clerk’s entry of default against a man accused of participating in a Racketeer Influenced and Corrupt Organizations (RICO) Act conspiracy to defraud Allstate in a purported scheme where the man, his companies and related parties engaged in hazardous material cleanups that were allegedly unnecessary or did not involve Allstate insureds, finding that the man’s lack of compliance with court orders was “willful.”
May 14, 2025
Wisconsin Panel Affirms Judgment For Insurer In Fire Coverage Dispute With Insured

WAUSAU, Wis. — A Wisconsin Court of Appeals on May 13 affirmed a lower court’s grant of summary judgment to a homeowners insurer in a dispute over coverage for wood stove-related fire damage and alleged misrepresentations about the usability of the stove, finding that the insured breached his insurance policy by not sitting for an examination under oath (EUO) before suing his insurer.
May 14, 2025
California Panel Reverses, Remands Ruling On Insurer’s Fraudulent Concealment Claim

LOS ANGELES — A California appeals court panel reversed a lower court’s ruling as to a plaintiff insurer’s fraudulent concealment claim against a defendant insurer in a coverage dispute over underlying claims that their mutual insured manufactured defective air respirators and masks that did not protect against inhaling silica, asbestos and mixed dust, remanding for a new trial on the fraudulent concealment claim.
May 13, 2025
Judge Denies Dismissal Of FCA Suit Alleging Upcoding In Emergency Department

SAN FRANCISCO — A California federal judge dismissed with prejudice only non-California state law claims against a California-based provider of emergency medical services but otherwise denied dismissal in a qui tam suit alleging that the provider and a national medical management company violated the federal False Claims Act (FCA) and similar state laws by fraudulent upcoding when submitting claims for payment to government insurers, finding that the “relator has plausibly alleged that the fraudulent scheme at issue” extends outside the hospital.
May 13, 2025
Magistrate: Motion For Judgment Should Be Denied In Federal False Claims Dispute

BUFFALO, N.Y. — A New York federal magistrate judge recommended denying an insurer’s motion for judgment on the pleadings and to amend its answer to assert a constitutionality challenge to a qui tam suit filed on behalf of the federal government and the state of New York alleging violations of the federal False Claims Act (FCA) and similar state law related to purportedly inflated Medicaid premiums, finding no “merit” to the constitutional challenge.
May 12, 2025
Nebraska High Court Reverses Judgment For Ex-Employee In Medicare Fraud Dispute

LINCOLN, Neb. — The Nebraska Supreme Court on May 9 reversed and remanded a judgment for a former employee in her suit alleging that she was terminated because she intended to cooperate with a federal investigation into her former employer’s alleged improper upcoding of Medicare charges, finding that the lower court should have granted the employer’s motion for a directed verdict because there is no cause of action for wrongful termination in violation of public policy when the statute on which the policy is based, the federal False Claims Act (FCA), has its own remedy.
May 12, 2025
High Court Review Sought Of Ruling Affirming Judgment In Insurance Fraud Dispute

WASHINGTON, D.C. — A company once owned by a man convicted in an insurance fraud scheme and over which a limited liability company (LLC) obtained an insurance fraud judgment in a New York federal court filed a petition for writ of certiorari in the U.S. Supreme Court seeking review of a 10th Circuit U.S. Court of Appeals decision affirming an Oklahoma federal court ruling granting summary judgment in favor of the LLC seeking to enforce the $6.7 million judgment in Oklahoma federal court.
May 09, 2025
3rd Circuit Won’t Rehear Ruling Affirming Dismissal Of FCA Suit Over Antibiotics

PHILADELPHIA — The Third Circuit U.S. Court of Appeals denied a petition for rehearing and rehearing en banc of its ruling affirming a lower court’s dismissal of a qui tam relator’s suit against Bayer Corp., Johnson & Johnson, Merck & Co. and other pharmaceutical companies, alleging that “hiding” side effects of their antibiotics from the U.S. Food and Drug Administration “caused fraudulent claims to be submitted to Medicaid and Medicare.”
May 08, 2025
Judgment Granted For Insurer In Rescission Suit Against West Virginia Lawyer

CHARLESTON, W.Va. — A West Virginia federal judge granted summary judgment to a professional liability insurer in its declaratory judgment suit seeking a declaration that a policy issued to an attorney and his firm is void ab initio for the attorney’s alleged material misrepresentations in the policy renewal applications regarding the attorney’s purported failure to disclose the existence of disciplinary actions filed against him, finding that summary judgment is appropriate because the “materiality is undisputed” and “the court deems” the misrepresentations “material as a matter of law.”
May 07, 2025
Former Billing Specialist Sues Gynecology Practice Over Alleged Billing Fraud

ORLANDO, Fla. — A former billing specialist for a Florida gynecology office on May 6 filed a complaint in a Florida federal court asserting claims against the office for allegedly terminating her in violation of the retaliation provisions in the federal False Claims Act (FCA) and similar Florida law for refusing to submit and complaining about the fraudulent submission of claims for payment to Medicare for services purportedly performed by medical students without physician supervision.
May 06, 2025
11th Circuit Certifies Question To Florida High Court In Fraud Coverage Dispute

ATLANTA — The 11th Circuit U.S. Court of Appeals deferred its decision on an appeal and certified to the Florida Supreme Court a Florida state law question regarding legal responsibility under the Florida Health Care Clinic Act in State Farm’s appeal of a lower court’s denial of its motions for summary judgment and reconsideration in a suit accusing chiropractic clinics, their owner and related parties of fraud for billing for purported unnecessary services and for violations of the Clinic Act.
May 05, 2025
Judge Deems Life Policy Void Absent Insurable Interest In ‘Imposter’ Policy Row

CHICAGO — An Illinois federal judge granted in part and denied in part a life insurer’s motion for summary judgment in a breach of contract suit against it by beneficiaries seeking to recover $150,000 in death benefits, granting summary judgment on the breach of contract claim upon finding that the policy is void ab initio due to the absence of an insurable interest.
May 02, 2025
DOJ Files Complaint Against Insurers, Brokers Over Medicare Kickback ‘Scheme’

BOSTON — The U.S. Department of Justice on May 1 filed a complaint in partial intervention in a Massachusetts federal court against health insurers Aetna, Anthem, and Humana alleging that they paid millions of dollars in kickbacks to insurance brokers to cause them to encourage beneficiaries to enroll in the insurers’ Medicare Advantage plans.
May 02, 2025
3rd Circuit Affirms Dismissal Of FCA ‘Kickbacks’ Suit Against Imaging Company

PHILADELPHIA — The Third Circuit U.S. Court of Appeals on May 1 affirmed a lower court’s ruling dismissing a relator’s qui tam suit filed on behalf of the U.S. government and multiple states against medical providers and a manufacturer of imaging agents used in X-ray imaging, alleging violations of the federal False Claims Act (FCA) for the providers submitting for reimbursement to the government claims allegedly related to kickbacks, finding that the amended complaint lacked the “particularity” required under the Federal Rules of Civil Procedure.
May 01, 2025
Gilead Agrees To Pay $202M To Settle Alleged Speaker Kickback Claims In FCA Suit

NEW YORK — The U.S. Attorney’s Office for the Southern District of New York announced that Gilead Sciences Inc. agreed to pay $202 million to settle a suit against it alleging that Gilead violated the False Claims Act (FCA) by paying remuneration to health care practitioners who spoke at Gilead speaker events to induce them to prescribe Gilead HIV drugs and causing false claims to be submitted to government insurers.
April 30, 2025
Court Won’t Toss Suit Against Regeneron Over Alleged Fraud In Vision Drug Pricing

BOSTON — A Massachusetts federal judge on April 29 denied dismissal of a qui tam suit against Regeneron Pharmaceuticals Inc. alleging violations of the federal False Claims Act (FCA) and similar state laws for purportedly fraudulently reporting the average sales price of a drug used to treat age-related vision impairment, finding that “the allegations sufficiently establish falsity under the FCA.”
April 30, 2025
Stay Granted In $1B Insurance Fraud Case Pending Sentencing In Related Cases

RALEIGH, N.C. — A North Carolina federal judge granted a consent motion to stay in a suit accusing Insurance magnate Greg Lindberg and his co-defendant asset management companies and other parties of Racketeer Influenced and Corrupt Organizations Act violations related to their purported participation in a $1 billion scheme to defraud now-insolvent insurers once owned by Lindberg.
April 30, 2025
Dismissal Denied In RICO Suit Over Alleged ‘Worthless’ $25M Dermatology Practice

NEW YORK — A New York federal judge denied dismissal of Racketeer Influenced and Corrupt Organizations Act claims against a couple and their dermatology practice in a suit by the companies that purchased the practice for approximately $25 million but alleged that it was “worthless” due to practices of fraudulent billing to insurers revealed in an audit, finding that the allegations suffice to “set forth acts of racketeering activity.”
April 29, 2025
Magistrate: Relator Must Provide All Alleged False Claims In FCA Kickback Suit

SAN DIEGO — A California federal magistrate judge granted Abbott Laboratories’ motion to compel discovery into all the alleged false claims it purportedly submitted to the government in a suit alleging Abbott violated the False Claims Act (FCA) and state false claim laws regarding Abbott’s purported kickback scheme to induce hospitals and physicians to use an Abbott cardiac medical device, finding that Abbott is “entitled to know the specific false claims” against it.
April 28, 2025
New York Panel Reverses Judgment For Allstate In Fraud Misrepresentation Dispute

ROCHESTER, N.Y. — A New York state appellate panel on April 25 reversed a lower court order granting summary judgment to Allstate Vehicle and Property Insurance Co. in a breach of contract suit against it over its purported failure to cover its insured homeowners’ claim for fire-related damages, finding that the underwriting guidelines do not show that Allstate would have denied the insured’s application for insurance had it known of the alleged misrepresentations in the policy application.
April 25, 2025
Default Judgment Entered Against Alleged Elder Abuser In LTC Insurance Fraud Suit

MOBILE, Ala. — An Alabama federal judge entered default judgment against an insured’s caregiver, who allegedly defrauded long-term care (LTC) insurer John Hancock Life Insurance Co., for failing to provide the more than $167,000 in services for which the caregiver received reimbursement, finding that because the caregiver failed to respond to the complaint or attend a court-ordered hearing, the complaint’s allegations, including that the caregiver was under investigation for elder abuse of the insured, are considered admitted.
April 24, 2025
6th Circuit Affirms Dismissal Of FCA Suit Alleging Fraud In Emergency Room Boarding

CINCINNATI — The Sixth Circuit U.S. Court of Appeals affirmed a lower court’s dismissal of a suit filed by relator physicians against a hospital and its parent company alleging violations of the False Claims Act (FCA) and related Michigan law for purported fraud in submitting claims for payment to government insurers for emergency room patients who were boarded as inpatient patients but received allegedly deficient care in the ER before a bed was available for them, finding that the allegations fail to satisfy the particularity required for fraud pursuant to the Federal Rules of Civil Procedure.