A Connell Foley litigation team succeeded in obtaining a treble damages award amounting to more than $5.65 million for their client, a New Jersey health insurer, in a lawsuit alleging three healthcare provider defendants improperly billed the insurer for services that were not actually performed.
The health insurer 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.
In the suit, which was filed in the Superior Court of New Jersey, Connell Foley’s client alleged defendants fraudulently submitted claims for diagnostic electroencephalogram (EEG) tests and comprehensive evaluation and management (E&M) visits for established patients. The health insurer client further alleged that claim forms submitted to the insurer 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, the health insurer claimed, the defendants procured from the insurer 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 were liable pursuant to three causes of action: violation of The New Jersey Insurance Fraud Prevention Act (IFPA), common law fraud, and negligent misrepresentation. Based on those findings, the jury in September 2024 unanimously awarded Connell Foley’s client nearly $2.5 million in damages.
Lee and Forrester subsequently filed an application for trebled damages on the IFPA count under N.J.S.A. 17:33A-7(b), as well as an application for reasonable attorneys’ fees, which the IFPA provides shall be awarded to a successful litigant. The court granted those applications, as well as the Connell Foley litigation team’s request that the judge treble the fee award and add prejudgment interest, resulting in a Jan. 10, 2024 order entering a judgment in favor of Connell Foley’s client for more than $5.65 million.
Following oral arguments, the court on Jan. 10 also denied the defendants’ motion for a new trial.
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