Zalma on Insurance
Education • Business
Insurance Claims professional presents articles and videos on insurance, insurance Claims and insurance law for insurance Claims adjusters, insurance professionals and insurance lawyers who wish to improve their skills and knowledge. Presented by an internationally recognized expert and author.
Interested? Want to learn more about the community?
October 08, 2024
Qualified Immunity to Report Suspected Fraud

Failure to Plead Actual Malice Defeats Suit

Post 4906

Read the full article at https://www.linkedin.com/pulse/qualified-immunity-report-suspected-fraud-barry-zalma-esq-cfe-ayarc, See the full video at https://rumble.com/v5ht5fh-qualified-immunity-to-report-suspected-fraud.html and at https://youtu.be/x3GnP0BgjYM, and at https://zalma.com/blog plus more than 4900 posts.

In Bond Pharmacy v. The Health Law Partners, P.C., No. 23-cv-13069, USDC Michigan (September 23, 2024) Plaintiff Bond (“AIS”), sued The Health Law Partners, P.C. (“HLP”).

FACTUAL BACKGROUND

In Bond Pharmacy Inc., d/b/a AIS Healthcare v. The Health Law Partners, P.C., No. 23-cv-13069, United States District Court, E.D. Michigan (September 23, 2024) Plaintiff Bond Pharmacy Inc., d/b/a as AIS Healthcare (“AIS”), sued The Health Law Partners, P.C. (“HLP”). In its Complaint, AIS alleged that HLP tortiously interfered with its contracts and business relations/expectancies and a declaration that HLP tortiously interfered with AIS’s contractual and business relations. HLP successfully moved to dismiss.

FACTUAL BACKGROUND

AIS is a private compounding pharmacy and a leading provider of home infusion therapy (“HIT”) services. HIT involves the dispensing and infusion of medication by non-oral means. AIS’s specialized HIT enables patients to receive custom medications through surgically implanted intrathecal pumps that deliver continuous targeted relief without requiring patients to leave home. HIT is typically prescribed for patients with chronic pain resulting from cancer, multiple sclerosis, spinal cord injuries, or other debilitating conditions.

Intrathecal pumps can administer medication to a patient daily for up to 180 days before needing to be refilled. This may occur at a physician’s office or the patient’s home.

AIS entered into provider agreements with insurance companies which pay for their members’ HIT services. Anthem is one of those entities. According to AIS, the provider agreements are in accordance with the National Home Infusion Association’s per diem reimbursement model. Under that model, AIS bills a specific billing code-HCPCS Code S9328-each day a patient has access to a prescribed therapy (i.e. AIS medication).

Beginning at some point in 2020, HLP contacted Anthem entities by telephone and in writing accusing AIS of improper billing practices. In its communications, HLP indicates that its “[c]lients have become aware of certain alleged practices/billings of AIS” which, in HLP’s “opinion, reasonably indicate[] that AIS may not be in compliance with [the payor’s] coverage standards and its [agreement with AIS].”

HLP emphasized that neither it nor its clients “are privy to all information regarding AIS and cannot make this determination ourselves.” HLP further conveyed that “[a]lthough our clients had a good-faith suspicion that AIS was involved in improper billing and other improper practices, they (and we) lack the investigative methods that are available to large insurers, like you and like BCBS of Michigan.” HLP encouraged the payors to investigate the matter.

AIS alleges that HLP’s statements to the payor entities were false and that HLP knew they were false when it made them. AIS further allegeD that HLP was aware of AIS’s contracts and business relationships with payors, and that HLP made the false statements to induce the payors to breach those contracts and relationships.

An Overview of the Parties’ Arguments

HLP raises several arguments in support of its motion to dismiss. First, it is entitled to qualified immunity under the Michigan Insurance Code, Mich. Comp. Laws § 500.4509. Second, HLP contends that it is entitled to civil immunity under Michigan’s Health Care False Claims Act (“HCFCA”), Mich. Comp. Laws § 752.1008a. HLP next argues that AIS failed to plead facts to show that HLP acted with malice-an essential element of its tortious interference claims. Lastly, HLP argued that AIS failed to allege that HLP engaged in illegal, fraudulent, or unethical conduct, which HLP maintained also is necessary to adequately plead tortious interference.

Applicable Law & Analysis

The statute reads, in relevant part: “A person acting without malice is not subject to liability for filing a report or requesting or furnishing orally or in writing other information concerning suspected or completed insurance fraud, if the reports or information are provided to or received from the insurance bureau, the national association of insurance commissioners, any federal, state, or governmental agency established to detect and prevent insurance fraud, as well as any other organization, and their agents, employees, or designees, unless that person knows that the report or other information contains false information pertaining to any material fact or thing.”

Michigan courts have adopted the defamation definition of the term “actual malice,” finding that it best comports with the Michigan legislature’s purpose in enacting the qualified immunity provision. That purpose, the state courts have found, is to foster the free exchange of information in investigations of insurance fraud and to protect persons who have provided information of suspected insurance fraud from liability.

Under the actual malice definition, requires that malice exists when a person supplying information or data to the appropriate authorities, as set forth in the statutes, does so with knowledge of its falsity or with reckless disregard of its truth or falsity.

The Court found that HLP is entitled to qualified immunity under the Michigan Insurance Code. Also the failure to adequately plead malice doomed AIS’s tortious interference claims even without considering qualified immunity.

A wrongful act per se is an act that is inherently wrongful or an act that can never be justified under any circumstances. Reporting suspected fraud is hardly “inherently wrongful” or “unjustified under any circumstances.” AIS needed to plead facts to show that HLP acted with malice and without legal justification, which, it did not do so plausibly.

AIS did not allege sufficient facts to evade HLP’s qualified immunity under the Michigan Insurance Code or to plead tortious interference under Michigan law. AIS, therefore, is not entitled to a declaratory judgment. Accordingly Defendant’s motion to dismiss was granted.

ZALMA OPINION

Michigan, like most states, provide a qualified immunity to people or entities who report, without malice, suspected insurance fraud. HLP did so, and reported its clients suspicions to the insurers who could be the victims of fraud. The insurers did so and reduced its payments to the plaintiff and sued HLP in an attempt to recover its losses the report caused when the insurer found it was paying for services not covered. Because HLP was provided a qualified immunity and the Plaintiffs were unable to allege actual malice.

(c) 2024 Barry Zalma & ClaimSchool, Inc.

Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.

Subscribe to my substack at https://barryzalma.substack.com/subscribe

Go to X @bzalma; Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01; Go to Barry Zalma videos at Rumble.com at https://rumble.com/account/content?type=all; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg

Go to the Insurance Claims Library – https://lnkd.in/gwEYk

00:10:54
Interested? Want to learn more about the community?
What else you may like…
Videos
Posts
5 hours ago
Sovereign Immunity Prevents Suit Against USA

Chutzpah: After Criminal Prosecution Defendant Sues USA
Post 5164

See the full video at https://lnkd.in/g_QAZY-d and at https://lnkd.in/gbF7vMxG and at https://zalma.com/blog plus more than 5150 posts.

Dr. Segun Patrick Adeoye, a medical doctor, filed a lawsuit against the United States of America, seeking damages for alleged violations during his criminal prosecution. He was acquitted by a jury but claims to have suffered significant harm, including financial losses, damage to his professional reputation, and personal distress.

In Dr. Segun Patrick Adeoye v. The United States Of America, Civil Action No. 4:25-cv-83, United States District Court, E.D. Texas, Sherman Division (July 23, 2025) the USDC dismissed Adeoye’s suit.

FACTUAL BACKGROUND

Dr. Adeoye was indicted on charges of conspiracy to commit wire fraud and money laundering. The indictment alleged that he and his co-conspirators obtained at least seventeen million dollars through various fraudulent schemes. Despite being acquitted, Dr. Adeoye claims that his ...

00:07:56
5 hours ago
Amount of Loss Set by Appraisal Award

Payment of Appraisal Award Defeats Claim of Bad Faith
Post 5163

Read the full article at https://lnkd.in/dNpKKcYx, see the full video at https://lnkd.in/dNgwRP8q and at https://lnkd.in/dA9dvd-D, and at https://zalma.com/blog plus more than 5150 posts.

Hurricane Damage to Dwelling Established by Appraisal Award

In Homeowners Of America Insurance Company v. Emilio Menchaca, No. 01-23-00633-CV, Court of Appeals of Texas, First District (July 31, 2025) after a hurricane Homeowners of America Insurance Company (“HAIC”) estimated that the cost of covered repair to Menchaca’s house was $3,688.54, which was less than his deductible, and therefore no payment would be made.

FACTS

After Menchaca retained counsel HAIC advised that, under the terms of the policy, Menchaca was required to first invoke the appraisal process prior to filing suit, and that HAIC reserved the right to request that Menchaca and any adjuster hired on his behalf submit to an Examination Under Oath (“EUO”).

On August 23, 2018, Menchaca’s counsel ...

00:08:45
August 07, 2025
Amount of Loss Set by Appraisal Award

Payment of Appraisal Award Defeats Claim of Bad Faith
Post 5163

Read the full article at https://lnkd.in/dNpKKcYx, see the full video at https://lnkd.in/dNgwRP8q and at https://lnkd.in/dA9dvd-D, and at https://zalma.com/blog plus more than 5150 posts.

Hurricane Damage to Dwelling Established by Appraisal Award

In Homeowners Of America Insurance Company v. Emilio Menchaca, No. 01-23-00633-CV, Court of Appeals of Texas, First District (July 31, 2025) after a hurricane Homeowners of America Insurance Company (“HAIC”) estimated that the cost of covered repair to Menchaca’s house was $3,688.54, which was less than his deductible, and therefore no payment would be made.

FACTS

After Menchaca retained counsel HAIC advised that, under the terms of the policy, Menchaca was required to first invoke the appraisal process prior to filing suit, and that HAIC reserved the right to request that Menchaca and any adjuster hired on his behalf submit to an Examination Under Oath (“EUO”).

On August 23, 2018, Menchaca’s counsel ...

00:08:45
July 16, 2025
There is no Tort of Negligent Claims handling in Alaska

Rulings on Motions Reduced the Issues to be Presented at Trial

Read the full article at https://lnkd.in/gwJKZnCP and at https://zalma/blog plus more than 5100 posts.

CASE OVERVIEW

In Richard Bernier v. State Farm Mutual Automobile Insurance Company, No. 4:24-cv-00002-GMS, USDC, D. Alaska (May 28, 2025) Richard Bernier made claim under the underinsured motorist (UIM) coverage provided in his State Farm policy, was not satisfied with State Farm's offer and sued. Both parties tried to win by filing motions for summary judgment.

FACTS

Bernier was involved in an auto accident on November 18, 2020, and sought the maximum available UIM coverage under his policy, which was $50,000. State Farm initially offered him $31,342.36, which did not include prejudgment interest or attorney fees.

Prior to trial Bernier had three remaining claims against State Farm:

1. negligent and reckless claims handling;
2. violation of covenant of good faith and fair dealing; and
3. award of punitive damages.

Both Bernier and State Farm dispositive motions before ...

post photo preview
May 15, 2025
Zalma's Insurance Fraud Letter - May 15, 2025

ZIFL Volume 29, Issue 10
The Source for the Insurance Fraud Professional

See the full video at https://lnkd.in/gK_P4-BK and at https://lnkd.in/g2Q7BHBu, and at https://zalma.com/blog and at https://lnkd.in/gjyMWHff.

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/ You can read the full issue of the May 15, 2025 issue at http://zalma.com/blog/wp-content/uploads/2025/05/ZIFL-05-15-2025.pdf
This issue contains the following articles about insurance fraud:

Health Care Fraud Trial Results in Murder for Hire of Witness

To Avoid Conviction for Insurance Fraud Defendants Murder Witness

In United States of America v. Louis Age, Jr.; Stanton Guillory; Louis Age, III; Ronald Wilson, Jr., No. 22-30656, United States Court of Appeals, Fifth Circuit (April 25, 2025) the Fifth Circuit dealt with the ...

May 15, 2025
CGL Is Not a Medical Malpractice Policy

Professional Health Care Services Exclusion Effective

Post 5073

See the full video at https://lnkd.in/g-f6Tjm5 and at https://lnkd.in/gx3agRzi, and at https://zalma.com/blog plus more than 5050 posts.

This opinion is the recommendation of a Magistrate Judge to the District Court Judge and involves Travelers Casualty Insurance Company and its duty to defend the New Mexico Bone and Joint Institute (NMBJI) and its physicians in a medical negligence lawsuit brought by Tervon Dorsey.

In Travelers Casualty Insurance Company Of America v. New Mexico Bone And Joint Institute, P.C.; American Foundation Of Lower Extremity Surgery And Research, Inc., a New Mexico Corporation; Riley Rampton, DPM; Loren K. Spencer, DPM; Tervon Dorsey, individually; Kimberly Dorsey, individually; and Kate Ferlic as Guardian Ad Litem for K.D. and J.D., minors, No. 2:24-cv-0027 MV/DLM, United States District Court, D. New Mexico (May 8, 2025) the Magistrate Judge Recommended:

Insurance Coverage Dispute:

Travelers issued a Commercial General Liability ...

See More
Available on mobile and TV devices
google store google store app store app store
google store google store app tv store app tv store amazon store amazon store roku store roku store
Powered by Locals