- A managed care company, an integrated health system and two nonprofit health systems in California have agreed to pay a combined $70.7 million to settle allegations of violating the federal False Claims Act, according to a Department of Justice release.
- The organizations, while not admitting liability, allegedly used funds intended for the states’ Medicaid adult expansion program in 2014 and 2015 for services that were duplicative or not allowed to avoid returning unused funds, according to the DOJ release.
- Ventura County Medi-Cal Managed Care Commission, which does business as Gold Coast Health Plan, will pay $17.2 million to the U.S. Ventura County will pay $29 million to the U.S., Dignity will pay $10.8 million to the U.S. and $1.2 million to the state and Clinicas will pay $11.25 million to the U.S. and $1.25 million to the state.
The DOJ has recently targeted healthcare fraud related to the COVID-19 pandemic, and in July announced criminal charges against 36 defendants for schemes related to telemedicine, cardiovascular and cancer genetic testing and durable medical equipment adding up to more than $1.2 billion.
The claims settled in California relate to the state’s adult Medicaid population expansion that occurred back in 2014.
Under the Affordable Care Act, California’s Medicaid program was expanded to cover the previously uninsured adult expansion population of adults between the age of 19 to 64 without dependents and with annual incomes up to 133% of the federal poverty line.
For the first three years of the program, the federal government fully funded expansion coverage. Under a California contract, If a county-organized health system did not spend at least 85% of those funds on “allowed medical expenses,” it was required to pay back the difference to the state.
The organizations allegedly submitted false claims to the states’ Medicaid program for additional services provided to adult expansion Medi-Cal members between January 2014 and May 2015 that were duplicative or not allowed to avoid returning unused funds under the program.
“The money at issue in this case was designated by the federal government to pay for services to treat Medicaid expansion patients, and it never should have been used to double-pay for services that already had been reimbursed or to pay for services that simply were never provided,” Acting U.S. Attorney Stephanie Christensen for the Central District of California said in the release.
As a result of the settlement, Gold Coast and Ventura have entered into five-year corporate integrity agreements. They must create centralized risk assessment programs and hire independent review organizations to complete annual reviews.
Those reviews for Gold Coast will focus on its calculation and reporting of medical loss ratio under Medi-Cal, and Ventura County’s will focus on hospital claims submitted to Medicare, Medicaid and Medicaid managed care organizations.
“Federal health care funds are not intended to serve as a blank check,” Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division, said in the release.