On June 29, the Department of Justice announced that three California healthcare providers and a county organized health system (COHS) agreed to pay $68 million to resolve allegations that they violated the False Claims Act (FCA) and California False Claims Act.
The organizations involved in the large settlement are CenCal, a county organized health system in Santa Barbara and San Luis Obispo that contracts through California’s Medicaid program (Medi-Cal); Cottage Health System (Cottage), a non-profit hospital network; Sansum Clinic (Sansum), a non-profit outpatient clinic; and Community Health Centers of the Central Coast (CHC), a non-profit community health center. The United States and California justice department’s alleged that CenCal, Cottage, Sansum, and CHC violated the FCA and California False Claims Act by submitting claims for “Enhanced Services” from Medi-Cal for services that were not eligible. 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 United States. California will receive additional payments totaling $1.85 million.
Former medical director of CenCal, Julio Bordas, blew the whistle on the county health system by filing a civil suit under the qui tam provision of the FCA. Qui tam claims enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between...
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