California Attorney General, Rob Bonta, in association with the US Department of Justice (USDOJ), announced four settlements totaling $68 million against three health care providers and one public health agency, all based in Central and Southern California for fraudulent Medi-Cal claims.
The settlement resolves allegations that Community Health Centers of the Central Coast ?CHC?, Cottage Health System ?Cottage? and Sansum Clinic ?Sansum? and CenCal Health submitted or caused fraudulent claims to be submitted to Medi-Cal in violation of state and federal false claims laws.
It is further alleged that the filings are part of an organized scheme to improperly withhold federal funds that financed the expansion of Medi-Cal for adults.
"Medi-Cal is a lifeline providing access to free or affordable health care services for millions of Californians and their families," said Attorney General Bonta.
“When any health care provider or agency defrauds the program, they break the public's trust and put profit before the patients who count on them for honest, quality care and services. The California Department of Justice and our law enforcement partners will continue to hold accountable those who defraud the Medi-Cal program and protect those it serves."
Pursuant to the Affordable Care Act ?ACA? Beginning in January 2014, Medi-Cal was expanded to cover the ?Adult Expansion? Previously Uninsured: Adults ages 19-64 with no dependent children and annual income up to 133 percent of the federal poverty level.
The four settlements resolve allegations that CHC, Cottage, Sansum and CenCal Health knowingly submitted or caused the submission of false claims to Medi-Cal for "additional services" provided to Adult Expansion Medi-Cal members.
California and the United States alleged that the payments were not "allowable medical expenses" under CenCal's health contract with DHCS, were predetermined amounts that did not reflect the fair market value of the additional services provided, and/or the additional services were a duplication of services already required to be provided.
Thus, California and the United States further claimed that the payments were illegal gifts of public funds in violation of the California Constitution.
The AE program was funded by the federal government. Therefore, most of the settlement amount will go to the federal government. California will receive a 10 percent share of the Medicaid recoveries because the case involves the California False Claims Law and the alleged fraud affected Medi-Cal.
Specifically, CenCal Health will pay 49.5 million to the United States; CHC will pay 3.15 million to the United States and 350 thousand to California; Cottage will pay $9 million to the United States and $1 million to California; and Sansum will pay 4.5 million to the United States and 500 thousand to California. In total, California will receive $1.85 million.
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