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Summary Judgment Obtained in Lawsuit Involving “Rent-A-Patient” Scam

Our client CalsonicKansei North America, Inc. found that one of its employees and his wife were involved in a “rent-a-patient” medical plan fraud scheme. Under such a scheme outpatient medical centers and doctors recruit individuals covered under generous medical plans to undergo fraudulent or unnecessary medical procedures in exchange for cash or for discounted cosmetic surgery. The employee was terminated after it was found that his wife had undergone a colonoscopy, an endoscopy, and a breast augmentation, all in a short time period, and the employee was unable to show that he had paid for his wife's cosmetic surgery. The employee and his wife sued and Blue Cross-Blue Shield of Tennessee in California state court, alleging that he was wrongfully terminated in violation of public policy and that Calsonic breached an implied contract to terminate him only for cause. His wife alleged that her medical privacy rights were violated because Calsonic learned of her cosmetic surgery. The employee's wrongful termination claim and the wife's negligence claim were eliminated via demurrer. Calsonic and BCBST then filed a summary judgment motion. The court ruled that despite the fact that the employee had been a Calsonic employee for over 20 years he remained employed at will and Calsonic did not need good cause to terminate his employment. The court also ruled that, even if the employee had a right to be terminated only for cause, Calsonic had good cause for terminating his employment. Finally, the court agreed with Calsonic and BCBST that the disclosure of information regarding the wife's cosmetic surgery was lawful because it was done during the course of a medical plan fraud investigation.


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