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The Eleventh Circuit has ruled that Allstate Insurance company is owed $663,000 in fees arising out of a multitude of false claims that were made by several Florida clinics. The circumstances of the case indicated that hundreds upon hundreds of insurance claims were completely bogus.
The defendants appealed their loss in federal court but lost again at the appellate level. Meanwhile, the doctor named in the case may want to consider retirement.
The principal issue to be decided was whether medical director Dr. Sara Vizcay's failure to thoroughly review claims made the clinic-defendants liable under the Florida Health Care Clinic Act and the doctrine of respondeat superior. Under FHCCA, clinic directors are charged with the responsibility of review claims billings in order to ensure accuracy.
But in this particular case, a review of the facts showed that Dr. Vizcay did not systematically review the billings with regularized scrutiny. In fact, it turned out that the Vizcay only reviewed about five bills per month even though about a hundred were being submitted by each clinic. An investigation by Allstate revealed that a good many claims submitted were false.
The jury agreed with Allstate and awarded damages for unjust enrichment for services that were never provided.
The authoring circuit judge found it "convenient" that the defendants interpreted FHCCA to mean that the medical director in charge of reviewing the claims could not claim responsibility "on behalf of the clinic." The court rejected this stance by the clinics and called the principal/agent theory a "hornbook" principal of the law. It also rejected the defense's contention that the FHCCA applied a vague notion of "bar minimum" review requirements of directors. "Whatever that minimum is," the court said, "the jury was presented with enough evidence to find that Dr. Vizcay did not come close to satisfying it."
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