Claims Administrator Faces Class Suit Over Alleged Sham Plan

A proposed class of people who bought allegedly bogus health insurance can proceed with several fraud-related counts against a claims administrator because they adequately pleaded facts showing its participation in the alleged scheme, a federal trial court said.

Administrative Concepts Inc. will face claims that it aided and abetted the fraud, as the complaint sufficiently alleged that the health plan’s administration was a crucial component of the scheme, the U.S. District Court for the Southern District of California said.

The complaint adequately pleaded ACI’s aiding and abetting liability by setting out facts that the administrator knew the plan was being ...