In last week’s enforcement actions involving the healthcare industry, the biggest story was the Aug. 18 announcement of three separate settlement agreements totaling $70.7 million by a California health system and three healthcare providers to resolve allegations of violating the False Claims Act.
The medical care providers and Ventura County’s organized health system were accused of submitting or causing the submission of false claims to California’s state Medicaid healthcare program, Medi-Cal, according to the U.S. Department of Justice (DOJ). Specifically, the entities in question allegedly billed Medi-Cal for “Additional Services” involving beneficiaries covered under Adult Expansion Medi-Cal, but those services, according to the DOJ:
- Were not “allowed medical expenses”
- Had pre-set prices “that did not reflect the fair market value of any Additional Services provided”
- Sometimes duplicated services “already required to be rendered”
- Fell into the category of “unlawful gifts of public funds,” thus violating Article IV, Section 17 of California’s constitution
The total $70.7 million in settlements also resolve claims brought forward in a qui tam whistleblower lawsuit by two former employees of the Ventura County Medi-Cal Managed Care Commission, Ventura County’s organized health system which does business under the name Gold Coast Health Plan. The settlements break down as follows:
- Gold Coast Health Plan: Will pay $17.2 million to the United States
- Ventura County, owner and operator of Ventura County Medical Center, will pay $29 million to the United States
- Not-for-profit health system Dignity Health will pay $10.8 million to the United States and $1.2 million to the State of California
- Non-profit healthcare organization Clinicas del Camino Real, Inc. will pay $11.25 million to the United States and $1.25 million to the State of California
In addition to their settlements, Ventura County and Gold Coast will also enter into five-year Corporate Integrity Agreements.1
Other Healthcare Companies in Hot Water
Other key healthcare-related enforcement actions announced last week include:
Aug. 18: The owner and operator of Lowry Medical Supply, Inc., a durable medical equipment (DME) company based in Nashville, Tennessee, were charged for their roles in an alleged $30 million healthcare fraud conspiracy. In addition to Lowry, the two also owned three other now-defunct DME companies based in Florida— AYMS LLC., Alliance DME LLC, and Medpros Associates LLC. However, those companies were “operated interchangeably” with Lowry, according to the DOJ. The owner and operator of the businesses are alleged to have paid bribes and kickbacks to medical professionals, who were working with fraudulent telehealth companies, in order to induce referrals to Lowry for medically unnecessary orthotic braces, which they then billed to Medicare. The two defendants each face a maximum of 10 years in prison if they are convicted.2
Aug. 19: Familia Healthcare Services Inc. dba Del Cielo Hospice and Palliative Care, a Texas-based healthcare company, agreed to settle False Claims Act allegations by paying nearly $1 million. The company is alleged to have billed Medicare for hospice services that patients were not covered for. The settlement also resolves claims brought forth in a qui tam whistleblower lawsuit by a former Del Cielo Hospice employee, who will receive a 16 percent share of the settlement proceeds.3
References:
- https://www.justice.gov/usao-cdca/pr/ventura-county-s-organized-health-system-and-3-medical-providers-agree-pay-707-million
- https://www.justice.gov/usao-mdtn/pr/owner-operator-former-nashville-based-lowry-medical-supply-inc-charged-healthcare-fraud
- https://www.justice.gov/usao-sdtx/pr/hospice-agrees-pay-nearly-1m-settle-false-claims-liability