July 15, 2024
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DOJ, health care orgs reach $68M settlement


The Department of Justice announced June 29 that three major health care providers and a Medi-Cal health plan on the Central Coast will pay $68 million to settle claims they submitted false information related to Medi-Cal and Medicaid reimbursements from 2014 to 2016.

CenCal Health provides health care coverage for more than 200,000 people in Santa Barbara and San Luis Obispo counties. (Brooke Holland photo)

The Santa Barbara San Luis Obispo Regional Health Authority, better known as CenCal Health, Cottage Health System, Sansum Clinic and Community Health Centers of the Central Coast were all named in the press release. The organizations have agreed to pay a total of $68 million to resolve allegations that they violated the False Claims Act and the California False Claims Act by submitting or causing the submission of false claims to Medi-Cal related to Medicaid Adult Expansion under the Affordable Care Act.

The release said the four organizations did not admit to wrongdoing in making the settlements; the claims were civil and no criminal wrongdoing was alleged.

The four settlements, according to the release, resolve allegations that the organizations involved knowingly submitted or caused the submission of false claims between 2014 and 2016. CenCal will pay $49.5 million to the United States, Cottage Health will pay $9 million, Sansum Clinic will pay $4.5 million, and CHC will pay $3.15 million. Additionally, California will get $1.85 million, but it wasn’t immediately clear which organizations were paying what to the state.

“These historic settlements demonstrate our steadfast efforts to eradicate fraud involving Medicaid Adult Expansion,” said U. S. Attorney Martin Estrada in the press release. “Health care systems and providers are on notice that the False Claims Act provides us with a powerful tool to ensure that taxpayer-funded health care programs are used for patient care, and not for furtive financial gain.”

In a separate statement, CenCal said that while it “disagrees with the government’s position” it agreed to “settle and put this matter behind us.”  CenCal said that all of the disputed payments were used to provide services to patients who were eligible under Medi-Cal.

The DOJ’s press statement also noted that several other health care organizations in the region have also settled similar allegations with the United States, including Dignity Health, Twin Cities Community Hospital and Sierra Vista Regional Medical Center.

“Medi-Cal is a lifeline that provides access to free or affordable healthcare services for millions of Californians and their families,” said California Attorney General Rob Bonta, in the same statement. “When any healthcare provider or agency defrauds the program, they break the public’s trust and put their own bottom line before the patients who count on them for honest, quality care and services. I am grateful to the USDOJ for its extensive efforts throughout the course of this investigation. 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.”