A decision by a California appellate court last month allows both Allstate and State Farm to pursue lawsuits seeking penalties against an Orange County pain-management doctor who is accused of over-billing insurers.
California’s Insurance Fraud Prevention Act allows insurers or other parties to file whistleblower lawsuits — called qui tam actions — that can result in awards of three times the amount charged plus penalties of $5,000 to $10,000 for each fraudulent bill. The law includes a first-to-file rule, which generally means no other actions can follow after an initial lawsuit is filed.
A panel of the 4th District Court of Appeal decided Dec. 14 that the first-to-file rule does not prevent two insurers from filing separate actions seeking penalties for separate sets of false claims. The panel reversed a decision by the Orange County Superior court that dismissed a lawsuit filed by State Farm because Allstate had already filed a lawsuit alleging the same fraudulent scheme.
Allstate Northbrook Indemnity Co. in September 2019 filed a qui tam suit against Dr. Sonny Rubin of Newport Beach, seeking penalties for false claims made against it after treating auto-accident claimants. A month later, State Farm Mutual Insurance Co. filed an action against Rubin describing a similar over-billing scheme and seeking penalties for all false claims made to any insurer.
The 4th District panel noted that the two lawsuits involve separate pools of victims.
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