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When the State fails to prosecute insurance fraud, the Insurer may bring an action against Qui Tam



California lawmakers created the Insurance Fraud Protection Act (IFPA) to combat insurance fraud. When, as here, a private insurance company contracts with a surgical center to provide medical services to its insured, the agreement includes an arbitration clause to resolve disputes. However, the insurance company brought a qui tam measure to recover damages and fees caused by the surgical center's fraudulent billing methods brought in the name of the state, not the insurer.

I State of California ex rel. Aetna Health Of California, Inc. et al. v. Pain Management Specialist Medical Group et al. 2d Crim. No. B299025, Court of Appeal of the State of California Second Appellate District Division Six (21 December 2020) The Court of Appeal was asked to rule that qui tam the measure is not subject to arbitration because it was brought on behalf of the State who is not a party to the agreement between the insurance company and the surgical center.

The defendants (collective pain relief) appealed against the decision of the Court of Justice to deny their request for enforcement of a qui tam document filed by Aetna Health of California, Inc. and Aetna Health Management, LLC (collectively Aetna ) on behalf of the State of California.

Aetna alleged fraudulent insurance billing practices by Pain Management and its healthcare billing services in violation of IFPA. (Code § 1871 et seq.). Pain Management filed a motion for annulment of Aetna's qui tam claim and Aetna's alleged individual claims. The trial court ruled that the state is the real party to the qui tam interest and cannot be forced to divorce.

FACTUAL HISTORY

Aetna filed a complaint against pain relief and other defendants, accusing a qui tam lawsuit against people in the state of California as well as individual allegations of fraud, among other causes. The complaint claimed that pain relief performed operations at its outpatient surgical centers in the network but billed Aetna as if the operations had been performed at its operations centers outside the network. As a result, Aetna Pain Management paid higher fees.

qui tam accusation that Pain Management violates IFPA by creating an illegal billing system for insurance fraud in violation of Criminal Code 550. Aetna provided copies of the sealed complaint to the California Department of Insurance and San Luis Obispo . Neither agency attempted to intervene and as a result the trial court qui tam ordered the complaint to be leaked. Aetna later dismissed the individual causes of action and continued to prosecute only the qui tam measure.

Pain relief moved to force arbitration for qui tam reasons. To support its proposal, Pain Management relies on arbitration clauses in its contracts with Aetna. Although the clauses differed slightly from contract to contract, they generally provided for mandatory binding arbitration administered by the American Arbitration Association and application of the Federal Arbitration Act, 9 United States Code sections 1-16, to exclude inconsistent state laws that would provide otherwise results. The trial court rejected the proposal to force arbitration. In a reasoned and thoughtful written decision, the court ruled that "the State, as the owner of the IFPA claim, is not a party to the contracts containing the arbitration clause."

DISCUSSION

The party seeking arbitration shall bear the burden. prove the existence of an arbitration agreement; the party opposing the arbitration shall bear the burden of proving any defense to arbitration.

The legislator adopted the IFPA to combat insurance fraud committed against insurance companies by individuals, organizations and companies. It is in the interest of the government that insurers investigate and prosecute qui tam procedures. The government serves to win both in terms of fraud prevention and financial of such acts, especially given the limited investigative and prosecuting authorities available.

The person bringing the qui tam action, the relation, stands the shoes of the people of the state of California, who are considered to be the real party of interest. The relation in a section 1871.7 qui tam measure does not recover personal damages, but, if successful, receives a significant share of the repayment as a bounty.

The procedural requirements of IFPA reflect that the state retains priority. The state can reject the measure, intervene in the measure or allow the related party to continue. As a result, the State cannot be forced to separate a qui tam IFPA document because it has not signed the agreements.

It is a main principle that arbitration is a matter of consent, not coercion.

The purpose of section 1871.7 is to prevent and remedy insurance fraud. Insurers, not government agencies, are direct victims of fraud. Insured are the indirect victims who pay higher premiums due to the occurrence of insurance fraud. The government does not necessarily recover funds lost to it due to fraud committed against it.

The Court of Appeal confirmed, after analysis, the decision to reject the proposal to force arbitration. of an individual, or with respect to multiple claims, as well as plaintiffs, in the face of inaction or total lack of interest from state police or prosecutors, California allows IFPA to file a whistleblower act in the name of the state. State insurance departments are inundated with reports of suspected insurance fraud and do not have the staff to investigate and prosecute all those reported. Insurers in states like California with an IFPA are obligated to work proactively to defeat fraud, as are plaintiffs by suing state courts. , now limits its practice to acting as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance claims and insurance fraud almost equally for insurers and policyholders. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance industry. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award.

For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claims staff to become insurance claims staff.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Zalma on Twitter at https://twitter.com/bzalma ; Go to Barry Zalma videos on Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the library for insurance claims – https://zalma.com/blog/insurance-claims-library/ Read posts from Barry Zalma at https://parler.com/profile/Zalma/ posts ; Go to the library for insurance claims – https://zalma.com/blog/insurance-claims-library/ [195659027] Like this:

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