The U.S. Court of Appeals for the Eighth Circuit recently authored an opinion addressing an offshoot of a lengthy government investigation that the government termed "Operation Backcracker." To effectuate the scheme at issue, chiropractors used recruiters to find automobile-accident victims who would receive treatment under Minnesota's No-Fault Act. In Taqueria El Primo v. Illinois Farmers Insurance, Case No. 23-3128, the Eighth Circuit vacated a district court opinion that had enjoined Illinois Farmers Insurance Co. and others (collectively Farmers) from entering into and enforcing civil settlements in which providers had agreed not to bill Farmers for treatment. The Eighth Circuit held unanimously that these "no-bill agreements" were legal in an opinion that turned on the statutory interpretation of Minnesota's No-Fault Act.

Background

The court pointed to a prior case, United States v. Luna, 968 F.3d 922, 924–26 (8th Cir. 2020), for a description of the scheme. Minnesota has a unique no-fault automobile-insurance system. It requires auto insurers to cover a minimum of $20,000 per person for "reasonable" and "necessary" medical expenses, regardless of who caused an accident. As a practical matter, although insurers can inquire into whether such care was reasonable and necessary, their standard practice is to pay the bills that are submitted.