A Boston federal jury found that disability insurer Unum Group committed fraud against the United States in some of its disability cases.
The Chattanooga, Tenn.-based disability insurance provider had allegedly required some of its customers to apply for Social Security benefits despite knowing that the claimants weren’t eligible for benefits.
The jury’s decision was based on a sampling of six cases, two of which were found to be fraudulent. Two other cases had no evidence of fraud, while the jury was unable to reach a decision on the remaining two cases.
The case against Unum was filed on behalf of the Social Security Administration under the Federal False Claims Act by Patrick J. Loughren, a Pittsburgh attorney. The plaintiff accused the insurer of threatening claimants with a slash in their benefits if they didn’t apply for Social Security.
In future hearings, both sides will seek a conclusion on what the sample of six cases indicates about Unum as well as the overall impact its actions had on the Social Security program.
Late yesterday, both sides also clashed publicly over what the jury’s decision really meant.
Phillips & Cohen LLP, the Boston law firm that represented Mr. Loughren, said that the insurer had enriched itself and “admitted” during the trial that it told “many of its customers” to apply for disability under Social Security, thus reducing its claims reserves and increasing profitability.
But Unum said that the law firm’s statement was “misleading and filled with inaccuracies,” asserting that the two claims decided in his favor resulted in an award of less than $3,000.
“Of the two remaining claims decided in favor of the plaintiff, we continue to believe they have no merit, and we think we will ultimately prevail upon appeal,” Chris Collins, Unum’s senior vice president and general counsel, said in a statement.
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