When caregivers admit that they cheated an insurer but claimed they were not responsible because the fraud was so obvious that the insurer could not prove the element of reliability of common law fraud, their defense and appeal is cumbersome. I Government Employees Insurance Co., GEICO Indemnity Company, GEICO Casualty Company, GEICO General Insurance Company v. Quality Diagnostic Health Care, Inc., et al., Jorge E. Martinez, Luis Anibal Queral, MD, Moulton Keane, MD, Ivelis Garcia, Michel Viera, LMT no. 21-10297, United States Court of Appeals, Eleventh Circuit (November 5, 2021) the Eleventh Circuit refused to buy the ridiculous defense that it was GEICO's fault that they managed to defraud GEICO.
The appeal stemmed from a claim – filed by Defendant to GEICO – for reimbursement under the Florida Motor Vehicle No-Fault Law, Florida State. §§ 627.730-627.7405. Florida's No-Fault Law requires car insurance to include personal injury protection ("PIP") to provide medical injuries to people injured in car accidents. In accordance with a valid allotment of PIP benefits by the insured, the care provider can file a claim directly with the insurance company to receive payment for medical services rendered.
In Florida, an insurance company is not required to pay a claim for compensation under certain circumstances; including for a "person who knowingly makes a false or misleading statement regarding the claim or fees", "[f] or any processing or service that is encrypted", or for fees that "do not substantially meet the applicable" statutory requirements. Fault Law also prohibits compensation for services – including physiotherapy services – performed by massage therapists.
GEICO claimed that the defendants were involved in fraudulent billing practices through Quality Diagnostic Health Care, Inc. ("Quality"), a Florida healthcare clinic that claimed to provide patient examinations and physiotherapy for patients injured in car accidents.GEICO say Defendant filed or had fraudulent non-refundable insurance claims filed under Florida's No-Fault Law.
GEICO sought to recover insurance payments already made to Quality (approximately $ 145,000) and requested a declaration that GEICO was not liable. any legal obligation to pay the remaining outstanding claims filed by Quality (approximately $ 79,000). In applicable parts, GEICO claimed against the defendants for declaratory judgments, fraud under customary law, unfair enrichment and for violations of Florida law of fraudulent and unfair trading practices ("FDUTPA").
. The district court granted GEICO's request for a summary judgment. . The district court found that these facts were undisputed:
- The defendants submitted bills to GEICO which incorrectly increased the level of service during initial and follow-up patient examinations and were therefore coded;
- all physiotherapy services invoiced to GEICO had been performed by an unattended massage therapist permission to practice physiotherapy (corresponding to Viera); and
- the invoices submitted to GEICO incorrectly represented that physiotherapy services had been provided by or under the direct supervision of a licensed physician (corresponding to Keane). repayment under Florida's No-Fault Law. In view of the defendants' awareness of false representations, the district court also granted a summary judgment on GEICO's claims for fraud under law and for violations of FDUTPA.
Under Florida law, a plaintiff claiming fraud must show:
- a false statement of fact;
- known by the person making the claim as false at the time it was made;
- made for the purpose of persuading another to act in confidence in this;
- action of the other person in trusting that the statement is correct; and
- injury to the other person. [ Gandy v. Trans World Comput. Tech. Grp. 787 So.2d 116, 118 (Fla. Dist. Ct. App. 2001)]. the service provided and, thus, was coded and misrepresented that the physiotherapy services had been provided by or under the direct supervision of a licensed physician.
knew that the defendant's allegations incorrectly represented the nature and scope of the patient examinations. According to the defendants, the invoicing deficiencies were "obvious" from the underlying treatment records and accident reports (to which GEICO had access) and GEICO was therefore informed that the defendants' commitments on their reimbursement invoices were false.
the district court rightly rejected these arguments. Under Florida law, a person can "rely on the truth of a representation, even if its falsity could have been established if he had conducted an investigation, unless he knows that the representation is false or that its falsity is obvious to him." [ Besett v. Basnett 389 So.2d 995, 998 (Fla. 1980)]
A falsehood is "obvious" when "a mere clear glance would have revealed the falsehood of the representation" or when a "clear investigation or investigation "would make" patent "the forgery. In the context of insurance, we have said that – in the absence of "any circumstance that draws attention to them" – information anywhere in an insurer's register is insufficient to make an insurer aware of the inaccuracy in petitions made to it. See Schrader v. Prudential Ins. Co. 280 F.2d 355, 362 (5th Cir. 1960) which stated that an "insurer has the right to rely on an insured's representations without checking all of its files to determine if the insured is committing fraud."
The Eleventh Circuit could not establish that the falsity of the defendants' erroneous submissions was "obvious". a more thorough examination of the complete treatment records and accident reports could have revealed the falsity of the defendants' statements.
UNFAIR ENRICHMENT & FDUTPA
To file a claim for unfair enrichment under Florida law, a plaintiff must prove three factors:
- the plaintiff granted the defendant a benefit;
- the defendant voluntarily accepted and retained the defendant. that advantage; and
- the circumstances are such that it would be unfair for the defendants to retain it without paying the value of it.
receive in the first place. GEICO paid the defendant over $ 145,000 in compensation for patient examinations and for physiotherapy services allegedly provided by Quality. It is common ground that the Defendant's claims – as they have been submitted – were not repayable under Florida's No-Fault Law. Since the defendants had no legal right to the compensation payments, the district court did not err in granting GEICO a summary judgment on its claim to unauthorized gain.
or unfair commercial practices; (2) causation; and (3) actual damage. " [ See Dolphin LLC v. WCI Cmtys., Inc. 715 F.3d 1243, 1250 (11th Cir. 2013).] The district court concluded that GEICO was entitled to a summary judgment because the defendants have recognized engaged. "fraudulent acts" or "unfair trading practices" when they coded fees and falsely represented that Dr. Keane performed or directly supervised the physiotherapy services and (2) there was a causal link between the defendants' misleading actions and GEICO's payment of the PIP claims.
It takes a lot of inability to appeal an unfavorable verdict after admitting that the behavior that resulted in a summary judgment in favor of GEICO was unpleasant because they admitted that they had cheated GEICO and raised the silly argument that GEICO should not have paid the fraudulent billing because they were obviously fraudulent. I can only wonder why the defendants or their lawyers were not sanctioned for raising such a frivolous appeal.
© 2021 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to the position of insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.
He also acts as an arbitrator. insurance-related disputes. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry.
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He is available at http://www.zalma.com and email@example.com. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award. For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claimants to become professionals in insurance claims.
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