“Runner” Must Pay Restitution to Insurers
The Eighth Circuit was called upon to decide the amount of restitution
owed by a participant in a recruitment-and-kickback scheme aimed at
defrauding automobile-insurance companies. The district court ordered
restitution for every chiropractic patient that Abdisalan Hussein
recruited from 2013 onward.
In United States of America Plaintiff v. Abdisalan Abdulahab Hussein,
also known as Abdisalan A. Hussein, No. 22-1275, United States Court of
Appeals, Eighth Circuit (August 23, 2023) the Eighth Circuit resolved
the dispute.
Background
Hussein ended up at a Twin Cities chiropractic clinic after an
automobile accident. The visit resulted in a job: the clinic hired him
to recruit patients. And then another one did too.
Hussein’s role was to bring in as many accident victims as possible.
Each new patient could undergo treatment up to $20,000, the limit of
basic economic benefits available under most Minnesota
automobile-insurance policies. In return, Hussein received a kickback of
up to $1,500, a portion of which he shared with patients who returned
for multiple visits.
The U.S. Government started “Operation Backcracker,” targeting insurance
fraud. If Hussein “qualified as [a] ‘runner’ [under Minnesota law],
then insurers had no obligation to reimburse the clinic[s] for any
services provided.” After a jury trial, the district court ordered
Hussein to pay restitution to the insurance companies he defrauded. He
complained, alleging he was not a “runner.” Because of Minnesota
statutory law, the Eighth Circuit explained that not all recruiters are
runners and restitution only applied to runners.
ANALYSIS
The linchpin of Hussein’s argument is that he was never a runner.
Once runners are involved, it taints the relationship and automatically
relieves insurers of their duty to pay. In statutory terms, once a
runner recruits someone, every health-care service provided afterward
becomes “non-compensable and unenforceable as a matter of law.”
A runner is someone who “directly procures or solicits prospective
patients” for “pecuniary gain” and “knows or has reason to know that the
provider’s purpose” is to “obtain . . . benefits under or relating to”
an automobile-insurance contract
The trial record completes the picture. Hussein received up to $1,500
per patient he recruited, which satisfies the pecuniary-gain
requirement.
The Eighth Circuit concluded that Hussein “directly procure[d]” these
patients with at least a “reason to know,” if not actual knowledge, that
the provider’s purpose was to obtain benefits under an
automobile-insurance contract.
One patient who testified that she called him about chiropractors even
though she did not know him while he referred to another as “a piece of
shit” for ending her visits. Neither were friends. And it goes without
saying that being a “helpful person” in the Somali community does not
transform every interaction into one “made in a social setting.”
The judgment of the district court was affirmed
ZALMA OPINION
The crime of insurance fraud is destroying the ability of the insurance
industry to serve the public and make a small profit. “Runners” called
“cappers” in other states are the first level of many insurance fraud
schemes. Hussein used his involvement in the Minnesota Somali community
to allow unscrupulous medical providers to defraud insurers. The court,
applying the strange Minnesota statute required Hussein to make
restitution to most of the insurers he defrauded and put a small dent in
auto insurance fraud in Minnesota. One can only hope they also
convicted the health care providers and made them pay restitution as
well.
(c) 2023 Barry Zalma & ClaimSchool, Inc.