ERISA Saves Fraudulent Claims Suit
Post number 5306
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Allegations of Fraudulent Insurance Billing Must be Pleaded with Specificity
In Genesis Laboratory Management LLC v. United Healthcare Services, Inc. and Oxford Health Plans, Inc., No. 21cv12057 (EP) (JSA), United States District Court, D. New Jersey (March 13, 2026) Genesis Laboratory Management LLC (“Genesis”), a New Jersey-based molecular diagnostic and anatomic pathology laboratory, provided COVID-19 related testing services and submitted claims for reimbursement as an out-of-network provider to United Healthcare Services, Inc. (“United”) and Oxford Health Insurance, Inc. (“Oxford”). Metropolitan Healthcare Billing, LLC (“Metropolitan”), owned by the same individual as Genesis, handled the billing for Genesis.
FACTUAL BACKGROUND
United and Oxford, who administer both ERISA and non-ERISA health insurance plans, allege that Genesis and Metropolitan, along with unnamed parties, submitted fraudulent reimbursement claims under various health plans.
ISSUES
1. Whether Genesis, Metropolitan, and associated parties submitted fraudulent claims for reimbursement under the health plans administered by United and Oxford.
2. Whether the Counterclaim Defendants’ motion to dismiss all counterclaims should be granted in whole or in part.
3. Which specific counterclaims, if any, survive dismissal under federal and state law standards.
LAW
The case involves federal, state, and common law claims, including those under the Employee Retirement Income Security Act of 1974 (ERISA) for certain plans, and state law for non-ERISA plans.
The legal issues center on allegations of fraud, improper billing, and the submission of false claims for reimbursement under health insurance policies administered by United and Oxford.
DISCUSSION
The Counterclaim Defendants moved to dismiss all counterclaims asserted by United and Oxford, who opposed the motion and filed a reply. The Court decided the motion on the papers without oral argument. The allegations involve both ERISA-governed and non-ERISA health plans, implicating different legal standards.
ANALYSIS
The Court found that the motion to dismiss warranted a mixed outcome, granting it in part and denying it in part. This indicates that some of the counterclaims did not meet the threshold for dismissal at this stage, while others were sufficiently challenged to warrant dismissal.
Federal Rule of Civil Procedure 12(b)(6)
Pursuant to Federal Rule of Civil Procedure 12(b)(6), a court accepts all well-pled factual allegations as true, construes the complaint in the plaintiff’s favor, and determines whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.
To survive a Rule 12(b)(6) challenge, a plaintiff’s claims must be facially plausible. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.
Counterclaimants Seek Recoupment Of Overpayments Based Upon Three Sets Of Allegations, All Of Which Appear To Underlie Each Counterclaim.
Counterclaimants do not state any claim against Metropolitan, nor do they state any state law or common law claim The Court will therefore grant the Motion in part and will dismiss multiple counts. Counterclaimants do, however, state an ERISA claim and a claim for declaratory judgment based upon the Cash Price Allegations as those allegations relate to ERISA plans. The Court will therefore deny the Motion in part and permit Counts One and Ten to proceed.
ERISA preempts state law and common law claims based on the Cash Price Allegations. Counterclaimants’ State law claims based on Genesis’s posted cash price for COVID-19 testing are preempted by § 1144(a).
Counterclaimants Need Only Satisfy Plausibility, And They Have Done So Here With Respect To Genesis.
Because the CARES Act did not modify non-ERISA plans, Counterclaimants cannot plead facts that would make their Cash Price Allegations actionable in the context of non-ERISA plans.
Because Counterclaimants adequately plead a violation of ERISA against Genesis, however, Counterclaimants may proceed with Count One against Genesis for overpayments under ERISA plans based on the Cash Price Allegations. Counterclaimants fail to explain why any diagnostic test (such as a COVID-19 test) needed to have been performed “separately” or only pursuant to a physician’s orders.
Accordingly, the Court will grant the Motion as to all claims based on the Ancillary Testing Allegations and will dismiss those claims without prejudice.
ZALMA OPINION
ERISA actions are singularly federal issues and if properly alleged can be stated in a federal court action. Other actions need to be pleaded carefully and the counterclaimants failed to do so and those allegations were dismissed without prejudice giving the parties the opportunity to try to plead their cases more carefully.
(c) 2026 Barry Zalma & ClaimSchool, Inc.
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Insurance Expert May Not Testify to Speculative and Contains Unsupported Conclusions.
Posted on September 18, 2026 by Barry Zalma
See the full video at and at https://rumble.com/v7fmifw-expert-may-only-testify-to-what-experience-supports.html
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The operative dispute concerned State Farm Auto’s motion to exclude or limit opinions from plaintiffs’ insurance-industry expert, Aaron Castillo. Castillo.
Law
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150 Months in Prison for Tax Fraud
Post 4846
Posted on September 17, 2026 by Barry Zalma
See the full video at https://lnkd.in/g8rh3JBX and https://lnkd.in/gmkdy-9C, In United States Of America v. Thomas Addaquay, Nos. 25-10609, 25-10611, United States Court of Appeals, Eleventh Circuit (September 9, 2026) the Eleventh Circuit affirmed all challenged convictions, the 150-month aggregate sentence, and the challenged $4,123,474.55 restitution award.
FACTS
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FACTS
Thomas Addaquay controlled United Consolidated Accounting and Business Services (UC), nominally a check-cashing business.
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Post 5489
Posted on September 14, 2026 by Barry Zalma
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Luis Manuel Garcia Salcedo, resulted in a $6 million settlement. Non-party Jose Hernandez allegedly worked as an assistant manager at Subin, operated Hernandez Associates, and owned litigation-funding companies that shared office space with Subin and provided services to its clients.
After Great American ...
Sentence for Stealing from Veterans Administration Reasonably Considers State Insurance Fraud & Arson Convictions
Post 4863
Posted on October 14, 2026 by Barry Zalma
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The VA determined that he misused $67,232.33 and removed him as fiduciary in 2022. Brewer pleaded guilty to theft of more than $1,000 in government property under 18 U.S.C. § 641. At sentencing, the district court attributed $53,567 in loss to him, producing an advisory Guidelines range of 15 to 21 months.
Citing the victim’s vulnerability, Brewer’s attempts to avoid responsibility, and his other fraudulent conduct — including state convictions for arson and insurance fraud — the court ...
Title Insurance Only Insures Real Property
Posted on October 13, 2026 by Barry Zalma
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Post 4862
In Dale Johnson and Rose Johnson, Husband and Wife v. Stewart Title Guaranty Co., and Lennar Mortgage, LLC; Low Va Rates, LLC; Sandpoint Title Insurance, Inc.; Village Capital & Investment, LLC; and David Cassel, Engineer Agent; and Unknown Does 1-50, inclusively, No. 53126, Court of Appeals of Idaho (October 9, 2026) Dale and Rose Johnson purchased Idaho real property in 2012 with a manufactured home on it. Their purchase addendum acknowledged that the seller could not obtain title to the home, that evidence of title and an ALTA-7 endorsement might not be available, and that they accepted the home “as is.”
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Denial Of Mental Health Diversion And Probation Condition Were Affirmed
Posted on October 9, 2026 by Barry Zalma
Post 4860
In The People v. Nicholas Daniel Stiles, A173483, A173646, California Court of Appeals, First District, Second Division (September 29, 2026) Nicholas Daniel Stiles pleaded no contest to one count of insurance fraud arising from his purchase of automobile insurance after a June 2021 collision, and to grand theft arising from an April 2024 incident at a 7-Eleven.
In both cases, the trial court suspended imposition of sentence and placed him on two years’ probation. Before the pleas, Stiles sought mental health diversion in both matters and filed a written motion seeking substitute appointed counsel. The diversion applications were denied, and the court never held a hearing on the motion.
LAW
Penal Code section 1001.36 permits pretrial mental health diversion when a defendant is eligible and suitable and the proposed treatment will meet the defendant’s specialized needs; denial is reviewed for ...
