A jury in New Jersey’s Superior Court unanimously awarded Horizon Blue Cross Blue Shield more than $2.4 million in a lawsuit alleging three healthcare provider defendants improperly billed Horizon for services that were not actually performed.
The defendants, Horizon alleged, fraudulently submitted claims for diagnostic electroencephalogram (EEG) tests and comprehensive evaluation and management (E&M) visits for established patients. Horizon alleged that claim forms submitted to Horizon materially misrepresented, among other things, that these services were performed, were medically necessary, and were ordered by persons who were properly licensed and qualified to provide medical diagnostic and treatment services. As a result of these misrepresentations, Horizon claimed, the defendants procured from Horizon payments that would not have been reimbursed if the nature of the services actually rendered had been known.
The jury unanimously found that, by making these misrepresentations, the defendants—C. Samuel Verghese; James Claire, D.O.; and Integrative Medicine & Biofeedback Clinic—were liable pursuant to three causes of action.
The jury found a pattern of five or more related violations of the Statutory Insurance Fraud in violation of The New Jersey Insurance Fraud Prevention Act (IFPA), N.J.S.A. 17:33A-4(a), subsections (1) and (3) of which require a showing that the defendants:
- Presented or caused to be presented any written or oral statement as part of, or in support of, a claim for payment or other benefit pursuant to an insurance policy, knowing that the statement contains any false or misleading information concerning any fact or thing material to the claim; or
- Concealed or knowingly failed to disclose the occurrence of an event which affects any person’s initial or continued right or entitlement to (a) any insurance benefit or payment or (b) the amount of any benefit or payment to which the person is entitled.
The defendants were also found to have committed common law fraud and negligent misrepresentation.
The jury awarded $2,412,555.45 in damages, for which the defendants are liable in the following percentages: 50% Verghese, 40% Claire, 10% IMBC.
Horizon was represented by Patricia Lee, chair of Connell Foley’s ERISA and Benefit Plan Litigation Group, and Tom Forrester, a partner in the firm’s Commercial Litigation Group.
Lee and Forrester are now applying to the judge for trebled damages on the IFPA count under N.J.S.A. 17:33A-7(b). They are also applying for reasonable attorneys’ fees, which the IFPA provides shall be awarded to a successful litigant, and are asking the judge to treble the fee award.
The Connell Foley trial team also included paralegal Randi Vuich.
The New Jersey Law Journal covered the story. Subscribers can read it here.
Case Caption:
HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY v. INTEGRATIVE MEDICINE & BIOFEEDBACK CLINIC, JAMES CLAIRE, D.O., and C. SAMUEL VERGHESE
DOCKET NO.: ESX-L-1434-17
SUPERIOR COURT OF NEW JERSEY, LAW DIVISION, ESSEX COUNTY
Trial Court Judge: Annette Scoca, J.S.C.