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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Amended Complaint Provides Escape from Anti-Assignment Condition
Post number 5345
Read the full article at https://www.linkedin.com/pulse/proper-inconsistent-pleading-defeats-policy-condition-barry-mrugc, shttps://www.linkedin.com/pulse/proper-inconsistent-pleading-defeats-policy-condition-barry-mrugc and at https://zalma.com/blog plus more than 5300 posts.
State Farm’s Responsive Pleading Defeated Motion on Anti Assignment Condition
In Tyra Caire Treadway v. State Farm Fire And Casualty Company, Civil Action No. 23-6834, United States District Court, E.D. Louisiana (April 28, 2026) Plaintiff Tyra Caire Treadway owned property at 7000-02 Jeannette Street, New Orleans, Louisiana, which was insured under a State Farm homeowners’ policy.
Hurricane Ida struck Louisiana on August 29, 2021, causing damage to the property. Nearly two years later, on August 9, 2023, Treadway sold the property to M1SRJT Jeanette, LLC and assigned her State Farm insurance claim, including the right to pursue additional damages and penalties for ...
Amended Complaint Provides Escape from Anti-Assignment Condition
Post number 5345
Read the full article at https://www.linkedin.com/pulse/proper-inconsistent-pleading-defeats-policy-condition-barry-mrugc, shttps://www.linkedin.com/pulse/proper-inconsistent-pleading-defeats-policy-condition-barry-mrugc and at https://zalma.com/blog plus more than 5300 posts.
State Farm’s Responsive Pleading Defeated Motion on Anti Assignment Condition
In Tyra Caire Treadway v. State Farm Fire And Casualty Company, Civil Action No. 23-6834, United States District Court, E.D. Louisiana (April 28, 2026) Plaintiff Tyra Caire Treadway owned property at 7000-02 Jeannette Street, New Orleans, Louisiana, which was insured under a State Farm homeowners’ policy.
Hurricane Ida struck Louisiana on August 29, 2021, causing damage to the property. Nearly two years later, on August 9, 2023, Treadway sold the property to M1SRJT Jeanette, LLC and assigned her State Farm insurance claim, including the right to pursue additional damages and penalties for ...
BACKGROUND
See the video at https://rumble.com/v79dts2-crime-doesnt-pay.html and at https://youtu.be/dw0f4goCbxA, and at https://zalma.com/blog plus more than 5300 posts.
Plaintiff:
Andrew J. Mitchell, an incarcerated individual proceeding pro se sued Pandit Law Firm, LLC, on behalf of a corporation that was controlled by Mitchell who had operated Mitchell Adjusting International LLC (MAI), a Texas limited liability company.
According to the US Attorney:
A Texas man (Mitchell) acting as an insurance adjuster who cheated an Albany church out of millions of dollars paid out by its insurance company to repair its facilities heavily damaged by Hurricane Michael in 2018 was sentenced to serve more than 19 years in prison and ordered to pay nearly $4 million in restitution to victims in several states.
Andrew Mitchell, formerly Andrew Aga, 46, of Houston, Texas, was sentenced to serve 235 months in prison to be followed by three years of supervised release and was ordered to pay $2,895,903.01 in restitution to the Brotherhood ...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
It is Fraud to Make the Same Claim Twice
Read the full article at https://www.linkedin.com/pulse/fraud-make-same-claim-twice-barry-zalma-esq-cfe-c4g8c and at https://zalma.com/blog.
Chutzpah: After Being Paid for a New Roof Insured Makes Second Claim For Same Damages
Post number 5347
No One is Entitled to be Paid for the Same Loss Twice
In Mohammed Ali Khalili v. State Farm Lloyds, No. 14-25-00611-CV, Court of Appeals of Texas (April 30, 2026) Khalili maintained a State Farm Lloyds homeowners insurance policy for decades. In 2008 he filed a roof-damage claim; State Farm paid him to replace the entire roof (shingles and gutters). Khalili never replaced the roof and repeated his claim.
BACKGROUND
In 2021 he filed a second roof claim. State Farm’s inspectors found the roof “very old” with extensive non-storm-related damage. The claim was denied because (1) the damage did not exceed the deductible and (2) State Farm had already paid for a full roof replacement.
PROCEDURAL HISTORY
State Farm filed motion for summary...
What Must be Done after Notice of a Claim is Received by the Insurer
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A first party property policy does not insure property: it insures a person, partnership, corporation or other entity against the risk of loss of the property. Before an insured can make a claim for indemnity under a policy of first party property insurance the insured must prove that there was damage to property the risk of loss of which was insured by the policy. The obligation imposed on the insured ...
