Although these various statutes have
many procedural aspects in common, it is important to be cognizant of the differ- ences in statutory scheme. Although there have not been many reported cases as of yet interpreting section 1871.7, con- cepts of “original source” and “public disclosure” may be analyzed differently than under False Claims Act cases.
Future issues An interesting case currently pend-
ing before Los Angeles Superior Court is The People of the State of California and The People ex rel. Wilson v. Bristol Myers Squibb, BC 367873 pending before the Honorable Judge Carl West in Department 322. The case is being pros- ecuted by the California Department of Insurance and by the relators represent- ed by Gary Paul, Esq. and his team at Waters, Krauss and Paul, LLP. The com- plaint alleges that Bristol Myers Squib (“BMS”) paid doctors illegal incentives, in effect bribery, in order to get the doc- tors to prescribe their drugs. This con- duct is illegal under various Anti- Kickback provisions in state and federal law.
This case raises the interesting issue
of whether a physician can be held liable under this statute. The statute prohibits the uses of “runners, cappers, steerers, or other persons to procure clients or patients….” (§ 1871.7, subd. (a).) (Italics added.) There is nothing in the statute or its legislative history that excludes physicians from being subject to these provisions. It seems pretty clear that if a physician takes part in a fraudulent scheme to obtain funds from an insurer, the physician can also be as liable as any of the other actors covered by the statute. BMS argues that by definition a physi- cian cannot be a “runner,” “capper” or “steerer.” This position seems to ignore the fact that physicians and other per- sons are often major participants in insurance fraud. Many frauds could not be successful without the cooperation of an industry professional. (Cf. People ex rel. 20th Century Ins. Co. v. Building Permit Consultants, Inc. (2d Dist. 2002) 86 Cal.App.4th 280.) BMS has filed a
demurrer in that case which was denied on October 28, 2011, by the Honorable Judge West on the issue of whether a physician can be held liable under this statute.
Conclusion The cases working their way through
the system could have a significant impact on fighting fraud against both insurers and their insureds. Using this tool, practitioners can have a great impact in holding wrongdoers account- able.
Adam D. Miller is a partner in
Engstrom, Lipscomb & Lack, in Los Angeles. He concentrates on complex business litigation including qui tam, class action, securities and investor fraud and entertain- ment litigation. He was most recently one of the lead attorneys for the Relator Ven-A-Care of the Florida Keys in the Average Wholesale Pricing fraud cases, which is the largest health care whistleblower case in history. Miller has his undergraduate degree from the University of Wisconsin - Madison and a law degree from DePaul University where he was a mem- ber of the Law Review. He was formerly an Assistant District Attorney in Kings County (Brooklyn), New York; an enforcement attor- ney with the United States Securities and Exchange Commission and an Associate General Counsel of the Directors Guild of America.
JANUARY 2012 The Advocate Magazine — 69
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