A group of California healthcare providers, including two health systems and a health plan, have agreed to pay $68 million to settle allegations that they submitted false claims to Medi-Cal related to Medicaid Adult Expansion under the Patient Protection and Affordable Care Act
The Santa Barbara, Calif.-based defendants named in the Justice Department settlement include:
- Santa Barbara San Luis Obispo Regional Health Authority
- CenCal Health, a county organized health system that contracts to arrange for the provision of services under Medi-Cal
- Cottage Health System, a five-hospital nonprofit system
- Sansum Clinic, a nonprofit outpatient clinic with over 300 providers and 20 locations
- Community Health Centers of the Central Coast, a nonprofit community health center with more than 800 employees and 31 clinics
The settlements resolve allegations that CenCal, Cottage, Sansum and Community Health Centers knowingly submitted or caused the submission of false claims to Medi-Cal for "enhanced services" that were purportedly provided to adult expansion Medi-Cal members, according to the Justice Department.
Prosecutors alleged that the payments were not "allowed medical expenses'' permissible under the contract between California's Department of Health Care Services and CenCal; were pre-determined amounts that did not reflect the fair market value of services provided; and the enhanced services were duplicative of services already required to be rendered. They also alleged that the payments were unlawful gifts of public funds in violation of the California Constitution.
As a result of the settlements, CenCal will pay $49.5 million, Cottage will pay $9 million, Sansum will pay $4.5 million, and CHC will pay $3.15 million to the U.S. In addition, California will receive payments totaling $1.85 million.
The settlements include the resolution of claims brought under the whistleblower provisions of the False Claims Act by Julio Bordas, MD, CenCal's former medical director. Dr. Bordas will receive about $12.56 million of the federal recovery.
CenCal and Sansum Clinic did not respond to Becker's request for comment.
A spokesperson for Cottage told Becker's that the system "provided all services to the most vulnerable in our community consistent with the requirements of the program administered by CenCal," received fair market value compensation for the services provided and maintained that payments were properly received.
The Justice Department settled similar allegations against San Francisco-based Dignity Health and two Tenet Healthcare-affiliated facilities in California in December. The providers agreed to pay more than $22 million combined to settle Medi-Cal billing fraud allegations.