Fraud Perpetrators Fail in Attempt to Get Around Settlement
Post 4849
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"Operation Back Cracker" (a joint state and federal criminal investigation) exposed a ring of Minnesota healthcare providers (mostly chiropractors) who were recruiting car accident victims and fraudulently billing auto insurers for their treatment. In related civil settlements, several providers agreed not to bill some of the insurance companies for any treatment provided to their insureds.
The chiropractors sued seeking to void the no-bill agreements used to reduce the insurers losses, by claiming the settlements violated the Minnesota No-Fault Automobile Insurance Act. The district court enjoined Illinois Farmers Insurance Company and others (together, Farmers) from entering into or enforcing the no bill agreements.
In Taqueria El Primo LLC, et al v. Illinois Farmers Insurance Company; et al Coalition Against Insurance Fraud Amicus, No. 23-3128, USCA, Eighth Circuit (July 31, 2024) in a question of first impression: whether no-bill agreements "ha[ve] the effect of providing[] managed care services" and the Eighth Circuit resolved the issue.
THE LITIGATION
Plaintiffs represent both an injunctive class and a damages class of people insured by Farmers.
The No-Fault Act requires insurers to provide "[b]asic economic loss benefits" when an insured is injured by the maintenance or use of a motor vehicle.
Some agreements go so far as to clarify that bills submitted by the provider are void and that the provider "may not collect the bills from Farmers and/or the insured/claimant who received the treatments."
ANALYSIS
The No-Fault Act does not create a private right of action.
An insurer does not violate the Act by enforcing a no-bill agreement against a provider. Because the injunction prohibits the latter, it cannot stand and the injunction was vacated.
ZALMA OPINION
The chiropractors entered into a settlement to avoid losses as a result of being caught defrauding insurers. By promising not to bill the insurers for the future the insurers recouped their losses and incurred no new fraudulent losses. Attempting to break away from the agreement and continue to defraud the insurers they sought an injunction against enforcing the deal. The USDC fell for the claim and the Eighth Circuit saw through the scheme and vacated the injunction proving to Farmers and the other insurers involved you can't trust fraudsters.
(c) 2024 Barry Zalma & ClaimSchool, Inc.
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Detail Charging Defendant for Fraud is Sufficient
Post 5242
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Charges that Advises the Defendant of the Crime Cannot be Set Aside
In United States Of America v. Lourdes Navarro, AKA Lulu, No. 25-661, United States Court of Appeals, Ninth Circuit (December 4, 2025) Lourdes Navarro appealed the district court’s denial of her motion to dismiss the indictment and enter final judgment was in error.
FACTUAL BACKGROUND
The indictment alleged that insurers reimburse only for medically necessary services. Navarro performed unnecessary respiratory pathogen panel (RPP) tests on nasal swabs collected from asymptomatic individuals for COVID-19 screening.
Navarro billed over $455 million to insurers for those additional RPP tests that she knew to be medically unnecessary. These allegations constituted a plain, concise, and definite written ...
Louisiana Statute Prevents Enforcement of Contract Term Requiring Arbitration of Disputes
Post 5241
Read the full article at https://www.linkedin.com/pulse/international-convention-requiring-enforcement-award-barry-sttdc, see the video at and at and at https://zalma.com/blog plus more than 5200 posts.
In Town of Vinton v. Indian Harbor Insurance Company, Nos. 24-30035, 24-30748, 24-30749, 24-30750, 24-30751, 24-30756, 24-30757, United States Court of Appeals, Fifth Circuit (December 8, 2025) municipal entities including the Town of Vinton, et al sued domestic insurers after dismissing foreign insurers with prejudice. The insurers sought arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”) but the court held Louisiana law — prohibiting arbitration clauses in such policies—controls, as the Convention does not apply absent foreign parties who ...
Refusal to Provide Workers’ Compensation is Expensive
Post 5240
Read the full article at https://lnkd.in/guC9dnqA, see the video at https://lnkd.in/gVxz-qmk and at https://lnkd.in/gUTAnCZw, and at https://zalma.com/blog plus more than 5200 posts.
In Illinois Department of Insurance, Insurance Compliance Department v.USA Water And Fire Restoration, Inc., And Nicholas Pacella, Individually And As Officer, Nos. 23WC021808, 18INC00228, No. 25IWCC0467, the Illinois Department of Insurance (Petitioner) initiated an investigation after the Injured Workers’ Benefit Fund (IWBF) was added to a pending workers’ compensation claim. The claim alleged a work-related injury during employment with the Respondents who failed to maintain workers’ compensation Insurance.
Company Overview:
USA Water & Fire Restoration, Inc. was incorporated on January 17, 2014, and dissolved on June 14, 2019, for failure to file annual reports and pay franchise taxes. It then operated under assumed names including USA Board Up & Glass Co. and USA Plumbing and Sewer. The business ...
Zalma’s Insurance Fraud Letter
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ZIFL Volume 29, Issue 24
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Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
Read the following Articles from the December 15, 2025 issue:
Read the full 19 page issue of ZIFL at ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
