Class Action Blog : Consumer Fraud, Consumer Protection, Securities and Antitrust Lawyer & Attorney : Meiselman, Denlea, Packman, Carton & Eberz

Sutter Health, a large hospital and health care system in Northern California, wrongly disclosed the personal and private information of 4.2 million patients when it allowed a computer containing highly sensitive medical and personal records to be stolen.  The wrongly disclosed private records include patients' names, addresses, birth dates, phone numbers, medical record numbers and insurance plans.  Unfortunately, the personal medical information of nearly one million people was also disclosed.  In violation of required standards, the records and information were not encrypted, so victims of the disclosure face significant risks.

Sutter Health operates 24 hospitals in Northern California and works with many other facilities and doctors.  Hospitals and other entities that are entrusted with people's private information have an important legal obligation to maintain patient privacy.  Failure to meet this obligation is deeply harmful to patients; fortunately, people who are victimized by wrongful disclosures can be protected by the court system.  For example, when TRICARE failed to fulfill its responsibilities, Meiselman, Denlea, Packman, Carton & Eberz P.C. brought a high-profile class action lawsuit on behalf of 4.9 million people who were victimized by wrongful disclosure.

If you have received medical treatment at a hospital or facility operated by Sutter Health, from a doctor in the Sutter Health network, or if you suspect that your records might have been among those disclosed, please contact us immediately to discuss your legal rights. 

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Ten doctors, nurses, and staffers in South Florida recently pleaded guilty in a $25 million Medicare fraud conspiracy involving home health and therapy services. They are the latest of approximately 50 defendants convicted since federal prosecutors launched an investigation into the Miami-based scam in 2009.

The scam allegedly involved two Miami home health care agencies, ABC Home Health Inc. and Florida Home Health Providers Inc. The agencies claimed that they were providing home health and therapy services to housebound patients, including diabetics who supposedly were unable to inject themselves with insulin. But according to the Justice Department, the agencies falsified patient records so they could bill Medicare for services that the patients did not need and were not entitled to receive. 

For example, the defendant nurses created bogus patient files, falsely reporting that patients had symptoms including “tremors, impaired vision, weak grip, and inability to walk without assistance.” The point of the deceit was to make it seem that the patients were homebound and thus qualified for home health care benefits under Medicare.

The Justice Department announced that nine of the ten defendants admitted recruiting Medicare beneficiaries who allowed the two agencies to bill Medicare for services that were medically unnecessary and/or were never provided. The defendants pleaded guilty on September 20 and 21 to one count each of conspiracy to commit health care fraud, which carries a maximum 10-year prison sentence.

Since March 2007, the government has charged more than 1,140 people in nine locations nationwide with falsely billing the Medicare program more than $2.9 billion.

If you have information about these or any other health care providers who are defrauding any third-party payor, including Medicare, Medicaid or any private payor, we would like to discuss with you legal action to put an end to these serious abuses. Please contact us to discuss what you have observed. Your contact with us will be held in strict confidence. 

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Senior Citizens are routinely targeted for fraud often because they have a “nest egg,” own their home, and/or have excellent credit—all of which make them attractive to con artists.  Unfortunately, older Americans are less likely to report a fraud because they don't know who to report it to, are too ashamed at having been scammed, or don’t know they have been scammed. Fraudsters know the effects of age on memory, and they are counting on elderly victims not being able to supply enough detailed information to investigators.  Additionally, a victims' realization that they were swindled may take weeks, or even months, after contact with the con artist making it even more difficult to remember details from the event.

Senior Citizens are particularly susceptible to Health Care Fraud or Health Insurance Fraud.  These types of fraud can be highly lucrative to fraudsters and devastating to an elderly victim.  Some examples include:

Medical Equipment Fraud:  Equipment manufacturers offer “free” products to individuals.  Insurers are then charged for products that were not needed and/or may not have been delivered.

"Rolling Lab" Schemes:  Unnecessary and sometimes fake tests are given to individuals at health clubs, retirement homes, or shopping malls and billed to insurance companies or Medicare.

Services Not Performed:  Customers or providers bill insurers for services never rendered by changing bills or submitting fake ones.

Medicare Fraud:  Medicare fraud can take the form of any of the health insurance frauds described above.  Senior citizens are frequent targets of Medicare schemes, especially by medical equipment manufacturers who offer seniors free medical products in exchange for their Medicare numbers. Because a physician has to sign a form certifying that equipment or testing is needed before Medicare pays for it, con artists fake signatures or bribe corrupt doctors to sign the forms.  Once a signature is in place, the manufacturers bill Medicare for merchandise or service that was not needed or was not ordered.

The following tips may prove useful in avoiding Health Care Fraud or Health Insurance Fraud:

■          Never sign blank insurance claim forms.

■          Never give blanket authorization to a medical provider to bill for services rendered.

■          Ask your medical providers what they will charge and what you will be expected to pay out-of-pocket.

■          Carefully review your insurer's explanation of the benefits statement.  Call your insurer and provider if you have questions.

■          Do not do business with door-to-door or telephone salespeople who tell you that services of medical equipment are free.

■          Give your insurance/Medicare identification only to those who have provided you with medical services.

■          Keep accurate records of all health care appointments.

■          Know if your physician ordered equipment for you.

These tips are good “rules of thumb” to aid in protecting yourself or those you know against fraud.  However, con artists are constantly working to create new scams which prey on elderly victims.  If you or someone you know has been a victim of Health Care Fraud or Health Insurance Fraud, please contact us to discuss your legal options.  

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New York Attorney General Andrew Cuomo recently announced that his office had initiated an investigation into the life insurance industry regarding profits on death benefits retained from the families of deceased policyholders. Two insurance companies in particular -- MetLife and Prudential -- marketed and sold life insurance policies which permit a beneficiary named under the policy to place death benefits in interest-bearing accounts instead of being paid the entire death benefit in one lump sum. Prudential and other life insurance companies market the accounts, called "retained asset accounts," as a purported service to beneficiaries as the accounts allegedly give beneficiaries time to think about how they will spend and/or invest the life insurance payout. MetLife and Newark, New Jersey based Prudential, according to the allegations in the class action complaints, placed death benefits in interest-bearing accounts and issued IOUs to survivors. The life insurance companies, of which there are many, engaged in this practice supposedly as a service to allow bereaved beneficiaries time to think about what they'll do with the payout owed under each policy. The carriers made money by investing the funds in bonds and keeping the difference between returns and the interest they credit to the accounts. Meanwhile, the life insurance companies invested the funds for their own benefit and retained the difference between returns and the interest they credited to the accounts.

Mr. Cuomo's investigation was prompted by a Bloomberg Markets magazine report and a formal review of life insurance company practices by the New York State Insurance Department. According to the Bloomberg Markets magazine report, more than 100 carriers earned investment income on $28 billion owed to life insurance beneficiaries while the beneficiaries themselves lost a significant amount of money as a result of these allegedly deceptive accounts. New York-based MetLife, the biggest U.S. life insurer, and No. 2 Prudential are among the firms that administer the so-called retained-asset accounts and both have had class action lawsuits filed against them seeking compensation for allegedly violating policyholders' agreements by illegally changing the terms of their life insurance policies in order to avoid paying millions of dollars due to its policyholders who have suffered the loss of a loved one.

The class action lawsuits allege that both MetLife and Prudential, among other purported unlawful practices, instead changed their claims-handling practices to drastically reduce payments to policyholders. The lawsuits assert that these two insurance companies may be violating federal bank law and state common law by engaging in such practices, Bloomberg Markets reported. Importantly, unlike bank accounts, the life insurance accounts aren't guaranteed by the Federal Deposit Insurance Corp. ("FDIC"), resulting in policyholders having no recourse but to file lawsuits in attempt to recoup their promised death benefit under the policies.

For example, Prudential paid survivors like Cindy Lohman, the mother of a slain Army sergeant, 1% interest in 2008 on their Alliance Accounts, while it earned a 4.8%return on its corporate funds, according to regulatory filings. Ms. Lohman told Bloomberg that her IOUs were rejected twice by salespeople when she tried to use them to make retail purchases. In fact, life insurance beneficiaries should have full access to the money in their retained asset accounts and, should be able to withdraw the full amount right away or at a later date. Indeed, the American Council of Life Insurers, the industry lobby headed by MetLife Chief Executive Officer Robert Henrikson, said in a statement that, "Retained asset accounts provide a significant benefit to family members who are dealing with the emotional loss of a loved one." He allegedly failed to explain that in practice, beneficiaries end up losing money on the death benefit promised to them under the policies.

Thomas Considine, commissioner of the New Jersey Department of Banking & Insurance, said he instructed staff to question Prudential about Ms. Lohman's rejected IOUs. And New York regulators issued a letter to insurers urging greater disclosure of the accounts' terms and the absence of an FDIC backstop, Mr. Gaul said. The watchdog will then consider whether any rules would prohibit insurers from providing the accounts, Mr. Gaul said.  In addition, Pennsylvania Insurance Commissioner Joel Ario is considering a plan to require insurers to obtain the consent of beneficiaries before creating an account on their behalf. He said in an interview that his staff is studying the issue.

If you are a beneficiary of a life insurance policy purchased from a life insurance company, and death benefits belonging to you were placed in interest-bearing accounts or so-called "retained assets accounts", please contact us as soon as possible to discuss your legal options.

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A civil lawsuit has been filed against Central United Life Insurance Company (“Central United”) alleging that the company illegally changed the terms of its cancer insurance policies in order to avoid paying thousands of dollars due to its policyholders who get treatment for cancer.  Central United sold insurance contracts known as “specified disease” policies which promised to pay policyholders the amount charged to them for their medical care if they are diagnosed with cancer, even if their treatment is actually paid for by health insurance.

The lawsuit, filed by the Missouri Department of Insurance, alleges that Central United changed its claims-handling practices to drastically reduce payments to policyholders with cancer.  It is alleged that Central United decided to pay policyholders based on treatment costs, rather than actual damages.  For example, when consumers with health insurance receive medical treatment, insurance companies pay a negotiated rate, which is less than the rate billed to the consumer.  Central United allegedly reimbursed its policyholders who got cancer the lower negotiated rate -- not the actual rate billed to the consumer -- thereby shortchanging its policyholders of thousands of dollars on their medical claims and saving itself thousands, if not millions, of dollars.

“The very essence of insurance is providing protection when life-changing events occur,” said John M. Huff, Missouri Department of Insurance, Financial Institutions and Professional Registration, commenting on the civil lawsuit filed against Central United.  “There are few events more life-changing than cancer, and this arbitrary decision by Central United is an attempt to abandon its solemn responsibility to protect its policyholders facing a serious and sometimes deadly disease.”

If you are a consumer who purchased a Central United cancer policy, please contact us to discuss your legal options.

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The Missouri Department of Insurance conducted a market conduct examination of United Healthcare after patients and chiropractors filed complaints about the company improperly denying claims.  The Department of Insurance found United Healthcare violated state insurance laws by failing to evaluate the medical necessity of treatment before denying claims.  Pursuant to a settlement with the Missouri Department of Insurance, United Healthcare has agreed to reexamine at least 50,000 claims filed since 2004 by chiropractors who treated the company’s policyholders and will pay $536,000 in fines.

“When Missourians entrust their health coverage to an insurance company, they expect and deserve to be treated fairly and legally. We have taken this action to make sure that happens,” said John M. Huff, Missouri Department of Insurance, Financial Institutions and Professional Registration.  “We believe the review of these 50,000 files may determine money is due to other providers and possibly consumers.”

For any chiropractic claims it finds were improperly denied, United Healthcare must reimburse the physicians for those claims, plus interest.  In some cases, consumers may have paid the bills, rather than the chiropractors.  Those consumers would be entitled to reimbursement directly from United Healthcare.

Update:  Two class action were recently filed by chiropractors against insurance companies that have tried to recover what they believe were unwarranted payments.  The first suit, filed in New Jersey Federal Court by five practitioners and three state associations, charges that Aetna made improper repayment demands and that its post-payment audit process violates the federal Employee Retirement Income Security Act (“ERISA”).  The class action also claims that certain Aetna clinical policy bulletins misclassify chiropractically accepted procedures as experimental and investigational.  The second class action, filed in Chicago by 15 practitioners and their state associations, accuses the BlueCross BlueShield Association and a number of its state-based licensees of similar wrongdoing.

If you are a chiropractor or a consumer with health insurance coverage, and believe that your chiropractic claim was denied improperly, please contact us to discuss your legal options.

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New York State insurance regulators have fined American Medical and Life Insurance Company (“AMLIC”) for marketing limited health insurance policies through “misleading” advertisements which promised “peace of mind” for just $5 a day.  In reality, AMLIC policies were not comprehensive health insurance and left patients only with huge hospital bills.

For example, AMLIC advertised that its health insurance policies were a low cost option for the uninsured and underinsured, intimating that its policies provided comprehensive coverage.  In fact, the policies were limited coverage policies that did not provide comprehensive coverage.  Moreover, in one television advertisement the narrator states that AMLIC health insurance is available, “regardless of any pre-existing conditions,” while the print on the television screen stated, “most pre-existing conditions accepted” and the fine print on the policy itself stated that there was a six-month waiting period.

New York’s two year investigation of AMLIC found a Rochester woman who had purchased an AMLIC policy and ended up with hospital bills totaling $28,000.  Her AMLIC limited policy covered only $1,164 of the hospital bills.  In another case, a 36 year old New Yorker who suffered a stroke found out that his AMLIC policy covered just $250 in medical bills, leaving him with a bill of $29,917.

In commenting on AMLIC’s misleading ads, Governor David Paterson said, “Many New Yorkers are desperate for affordable health insurance. Unfortunately, some businesses are taking advantage of that need to sell limited health insurance in ways that mislead consumers into believing they are getting full coverage.”

If you purchased a health insurance policy from American Medical and Life Insurance Company, please contact us to discuss your legal options.

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State insurance regulators in Michigan have charged two businesses with selling fake health insurance policies, and the Georgia Insurance Commission issued cease and desist orders to two organizations allegedly acting as unlicensed insurers.

The Michigan Office of Financial and Insurance Regulation (“MOFIR”) ordered American Consumers Insurance (“ACI”) and its partner agency, Real Benefits Association (“RBA”), to stop selling allegedly fake health insurance policies.  The allegedly fake policies, which were marketed through radio advertisements, were sold in Michigan, Arkansas, New Jersey and New York.  “Basically these consumers [who purchased health insurance] were holding worthless pieces of paper,” said Jason Moon, a spokesman for MOFIR.  Regulators have also advised consumers who purchased health insurance coverage from ACI and RBA to immediately seek out and purchase legitimate medical insurance.

In Georgia, the Insurance Commission issued cease and desist orders to The Butler Aid Society and God First Missionary Membership Association and Floral Club.  Both organizations offered cash payments to members upon death, though neither entity is a licensed insurance company or registered as a pre-need funeral business.  “There’s a serious financial risk to consumers whenever you have a small operation like this, run out of somebody’s hip pocket without proper capitalization and regulatory oversight,” said Insurance Commissioner John W. Oxendine.

If you have purchased a health insurance policy through ACI and/or RBA, or a policy from The Butler Aid Society and/or God First Missionary, please contact us to discuss your legal options.

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All too often a physician treats a hospitalized patient and is then informed by the insurance company that the in-patient services, provided both by the hospital and physician, are not covered.  The physician accepts the insurance company’s representation and believes the matter is closed.  Far from it!  What the physician does not know is that the hospital appeals the denial of payment and is successful in receiving most, if not all, of the reimbursement from the insurance company.  At no time did the insurance company ever inform the doctor of the hospital’s appeal.  As a result, the physician either never finds out that the hospital has been reimbursed or does learn about it, tries to appeal, but is told that the appeal is now untimely.  As a result, doctors who fully deserved to be paid for the services they rendered are not compensated at all.

We believe the insurance companies have a duty to inform the physicians if the hospitals appeal under these circumstances so that the physicians can also submit a timely appeal and be appropriately compensated.

If you are a physician who provides in-hospital services, there is a good chance that you were/are a victim of this scheme.  If you have any questions or comments about this, please contact us.

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Most physicians are quite familiar with the following scenario. The insurance company advises the physician that he or she will be paid according to a certain fee schedule. Time passes, the physician examines the amounts reimbursed for services rendered and it is evident that the amounts paid are far less than what was agreed. The physician complains and the insurance company advises the physician that the fee schedule was modified and that the physician was notified about the modification before it was implemented and, in fact, had agreed to the modification. On further inquiry the insurance company explains that it faxed a “notice” to the physician informing the physician of the change and that unless the doctor opted out within a certain period of time (usually 30 days) the doctor is deemed to have accepted the revision. The insurance companies have used this notification methodology for years because they understand that most physicians are simply too busy to review every piece of paper that comes to them by fax or mail and that by the time the physician finds the “notice” (that is assuming the physician even received it), the physician is deemed as having accepted the modification. Such “notices” have been used to revise many important components of the provider-payor relationship.

Now the insurance companies are using this methodology coupled with potentially fraudulent practices to force physicians who never agreed to treat Medicaid patients to accept Medicaid patients at Medicaid rates. First, the insurance companies send the physicians the “notices” advising them that, unless they opt out within 30 days, they will be deemed as having accepted treating the insurance companies’ Medicaid insured at the Medicaid rates. The physicians never see the notices so they are deemed as having accepted the obligation. Second, when the Medicaid patients show up at the physicians’ offices, they present health coverage cards that identify them, not as Medicaid patients, but rather as commercial HMO patients (which has a higher reimbursement rate). The physicians render the services not realizing that they are treating Medicaid patients at Medicaid rates. It’s only when the physicians are reimbursed (assuming they are even reimbursed) that they realize what has happened. But by then it’s too late!

If you are a physician and find yourself encountering this situation, please contact us at mdpcelaw.com or (914) 517-5000. 

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A California court has severely criticized the use of chiropractic contracts in which patients pay in advance or agree to pay for many visits at a "discount" price, and held that two women were entitled to refunds from their chiropractor because their chiropractic extended treatment contracts were unconscionable. Chiropractors who offer these type of contracts typically tell their patients that long-term care is needed to prevent what they call "subluxation degeneration" (a mythical condition). Even if some treatment might be helpful, it is not possible to know in advance that a large specified number of visits will be needed.  In addition to excessive visits, these contracts often contain provisions intended to discourage quitting. Many of the contracts state that if treatment is stopped before all of the visits are used, any discount will be cancelled and visits used will be billed at their "full" price, and/or an "administrative fee" will be charged for early cancellation.

Moreover, in April 2008, the Maryland Board of Chiropractic and Massage Therapy Examiners advised chiropractors not to use extended treatment contracts. In February, 2009, the Kansas State Board of Healing Arts settled charges against a chiropractor through a consent order under which he must pay investigative costs plus a $5,000 fine; serve probation for two years; and provide full refunds to several patients who did not receive all of the treatments for which they contracted.

If you entered into an extended treatment contract with your chiropractor, please contact us to discuss your legal options.

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You may have recently come across a newspaper advertisement with the headline “Cut off set for free Universal Health Card.” The advertisement at first glance seems like a legitimate news item, when in fact it is a paid advertisement touting the Universal Health Card (“Card”), which purportedly gives you free “affordable care provided by 561,000 doctors, dentists, pharmacists and hospitals.” But the Card is not free; you have to pay an $18 “registration fee” to get a 30-day “free” trial. Thereafter, you must pay $49 per month to continue using the Card. Moreover, the Card cannot be used as a supplement, or replacement, for traditional health insurance. Rather, it can be used only to obtain a small discount at participating doctor’s offices, hospitals and pharmacies. 

Many State Attorneys General have received complaints about the Card, including from people who were told that their doctors participate in the program only to find out their medical providers do not accept it. Some consumers have even dropped their regular health insurance policies for the Card thinking it was cheaper, not realizing that the Universal Health Card is not health insurance, and that most doctors and hospitals do not accept the Card anyway.

A story broadcast on WAFF-TV in Alabama reports on the advertisement’s deceptive claims. The reporter contacted a number of the medical providers listed on the Universal Health Card website, and found that they did not accept the Card. The broadcast also noted that the Alabama Better Business Bureau contacted some of the Card’s listed medical providers and found that most did not accept the Card. WAAYYTV in Huntsville, Alabama broadcast a similar investigative report, and the Massachusetts North Adams Transcript has a story on insurance scams generally, including deceptive claims relating to the Card. The ombudsman of the North Carolina News & Observer even took his newspaper to task for accepting the Card’s advertisement, as he found the claims made in the ad were either deceptive or outright false.

If you have a purchased the Universal Health Card, please contact us to discuss your legal options.

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A Senate inquiry has found evidence that AARP’s health insurance products were deceptively marketed to its members. At issue are insurance plans that were sold by UnitedHealth Group and carry the AARP brand. According to the New York Times, more than a million people have bought the policies, which have names like AARP Medical Advantage, Essential Plus and Hospital Indemnity Plan. The Senate Finance Committee found the marketing of these health insurance policies misleading because it suggested that they offered comprehensive coverage. In fact, the policies pay fixed cash benefits for selected services, often times much less than consumers had been promised or expected.

For example, AARP’s Medical Advantage plan pays a maximum of $5,000 for surgical procedures that usually cost many times that amount. A consumer guide to this plan issued by AARP states that a Medical Advantage insurance policy “can be a real lifesaver for early retirees, part-time workers or people who just need to supplement their current health insurance.” Thus, uninsured members of AARP have purchased these policies thinking that they provide comprehensive medical coverage, when in fact they do not.

In response to the Congressional inquiry, AARP has suspended sales of the health insurance policies and has hired an outside investigator to look into sales of these policies.

If you have a purchased a limited-benefit health insurance policy through AARP, please contact us to discuss your legal options.

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