People v. Newman

Opinion

GRIGNON, J. Appellant and defendant Arthur Newman appeals from his conviction following a jury trial of submitting a false or fraudulent claim for payment of a loss (Ins. Code, § 556, subd. (a)(1))1 and preparing, making, or subscribing a writing in support of a false or fraudulent claim for payment of a loss (Ins. Code, § 556, subd. (a)(4)).2 Appellant contends that there was insufficient evidence to support his conviction. We conclude that the evidence was insufficient to support appellant’s conviction because a claim for payment for contractual services rendered to a health maintenance organization is not a claim for payment of a loss within the meaning of Insurance Code section 556. We reverse.

[386]Procedural History

In a three-count information, appellant was charged with grand theft by embezzlement (count I), submitting a false or fraudulent claim for payment of a loss (count II), and preparing, making, or subscribing a writing in support of a false or fraudulent claim for payment of a loss (count III). Appellant pled not guilty. Appellant’s motion to dismiss pursuant to Penal Code section 995 was granted as to the grand theft charge. Trial was by jury as to counts II and III. Appellant’s motion for acquittal pursuant to Penal Code section 1118.1 was denied at the close of the prosecution’s case-in-chief. Appellant was found guilty as charged of counts II and III. At sentencing, appellant was placed on probation for a period of three years on various terms and conditions. He appeals.

Facts

Appellant is a licensed pharmacist and the sole owner of Pomona Medical Plaza Pharmacy, Inc. (Pomona Medical). Intervalley Health Plan, Inc. (Intervalley) is a health maintenance organization licensed by the Department of Corporations to offer medical care to its members. Subscribers of the health plan contract with Intervalley for medical care for themselves and their dependents (members) in return for a prepaid fee. Intervalley directly contracts with providers of health care services to provide medical services to its members. Intervalley entered into a standard pharmacy services agreement with Pomona Medical. Under this agreement, Intervalley was to compensate Pomona Medical for prescriptions provided to the members of the health plan, based on the cost of the ingredients plus an additional dispensing fee. Generally, members also paid a copayment directly to the pharmacy. In order to receive payment, Pomona Medical was to submit claims to Intervalley for services rendered to its members. Intervalley also entered into an agreement with a pediatric medical group to be a provider for its members.