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Case Briefs

By ALM Staff | Law Journal Newsletters |
July 02, 2004

Medical Provider's Improper Corporate Structure Renders Its Bills Ineligible for Coverage

In Verano, Damian & Finkel, LLC and Ramsey Medical, P.A. v. Allstate Insurance Company, 366 N.J. Super. 1 (App. Div. 2004), Ramsey Medical provided medical treatment to an individual who was covered by an Allstate automobile insurance policy. Ramsey Medical subsequently submitted its bills to Allstate for payment. When Allstate failed to pay all of the bills, Ramsey Medical filed an arbitration demand against Allstate seeking to compel it to make payment on the outstanding bills. The parties entered into a settlement prior to the arbitration hearing.

Allstate failed to make the payments called for by the parties' settlement agreement. As a result, Ramsey Medical filed a complaint to enforce the settlement. Allstate answered the complaint and filed a claim against Ramsey Medical under the New Jersey Insurance Fraud Prevention Act (N.J.S.A. 17:33A-1 et seq.), which provides insurance carriers with a cause of action against claimants and others who submit statements to insurance companies in support of claims for payment knowing that the statements contain material misrepresentations. Ramsey Medical filed a motion for summary judgment seeking to enforce the settlement agreement. Allstate opposed the motion, arguing that it discovered subsequent to the settlement that Ramsey Medical was operating in violation of the New Jersey State Medical Board's Regulations, and that the plaintiff fraudulently concealed this fact from it.

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