Metropolitan News-Enterprise


Wednesday, April 25, 2012


Page 1


Court of Appeal Affirms Doctor’s Conviction for Paying for Referrals

State Law Not Preempted and Not Unconstitutionally Vague, Panel Rules




The Court of Appeal for this district yesterday affirmed a Van Nuys pediatrician’s conviction for paying various individuals $20 for each low-income patient who was referred to her practice and enrolled in government-funded preventative health programs for the uninsured.

Div. Four, in an opinion by Presiding Justice Norman Epstein, affirmed Rita Guiamelon’s conviction and sentence of three years’ probation for violation of Business and Professions Code Sec. 650. In doing so, it rejected the doctor’s claims that the statute is preempted by the anti-kickback provision of the Social Security Act, that it is unconstitutionally vague, and that it violates the First Amendment.

As a result of the conviction, she has been thrown out of the Medicaid program, suspended from hospital medical staffs, been tossed off the panels of third-party payers such as PPOs and HMOs, and lost her private office practice, her attorney, Patric Hooper of Hooper Lundy & Bookman, wrote in an online report of the case.

Defendant’s Testimony

Guiamelon testified at her trial before Los Angeles Superior Court Judge Brad M. Fox that she believed the payments were legal, which is why she gave the “marketers” IRS Form 1099s. She said she did not know what the term “capping” meant.

 It was necessary, she said, to market her practice in that manner because her patients were mostly poor Hispanics who were reluctant to approach government agencies for help.

The patients were enrolled in the Family Planning, Access, Care and Treatment, or Family PACT, program or the Children Health and Disability Prevention programs, which are limited to uninsured, non-Medi-Cal eligible patients.

 The defense argued that the state and federal statutes are conflicting, rather than complementary, because Sec. 650 lacks a ‘‘knowing and willful’’ element.  Epstein, however, said the difference between the elements of the state and federal offenses does not create a preemptive conflict, nor is the state statute an obstacle to the carrying out of federal policy.

Conflict Preemption Argument

Conflict preemption is inapplicable, the jurist said, because it is possible to comply with both statutes. The federal Department of Health and Human Services, he noted, has interpreted the federal act as not preempting state anti-kickback laws.

Given that the California law was enacted long before the federal provision, Congress is presumed to have known of it, and of other state’s laws like it, suggesting that there was no implied preemption, Epstein wrote.

The presiding justice went on to reject the “obstacle preemption” argument, based on similar reasoning. While the federal law has been interpreted as precluding conviction in the absence of a specific intent to violate it, there is no reason to believe that Congress had a “clear and manifest” intent to allow doctors who are unaware of the statute to do what it forbids, he said.

The jurist also rejected the defendant’s vagueness challenge. There is nothing ambiguous about the statute, he said—the legislation expressly prohibits doctors from paying for patient referrals, even in cases where the doctor claims to have acted in good faith and for the purpose of making those patients aware of the availability of care they would otherwise not receive.

First Amendment Argument

Epstein rejected the First Amendment argument, which was raised in a supplemental letter brief and was based on Sorrell v. IMS Health Inc. (2011) 131 S.Ct. 2653. The court, in a case decided last June, struck down a Vermont statute that prohibited, among other things, pharmaceutical manufacturers from using the results of ‘‘data mining’’ to market their pharmacy products to doctors.

 The state had argued that the law would improve public health and bring down costs, as well as safeguard medical privacy. The high court, however, said it unjustifiably interfered with commercial speech.

Unlike the Vermont law, however, Sec. 650 punishes conduct, not expression, Epstein said.

Deputy Attorneys General Mary Sanchez and John Yang represented the prosecution on appeal.

The case is People v. Guiamelon, B232188.


Copyright 2012, Metropolitan News Company