In the past week, five major Santa Barbara and San Luis Obispo health-care providers, including Cottage, Sansum, and CenCal Health, settled a long-festering fraudulent billing case with the federal Department of Justice, the state Attorney General, and CenCal’s former medical director Dr. Julio Bordas — the case’s whistleblower — for $68 million. Late last December, Dignity Health in Santa Maria and two hospitals in S.L.O. settled the same set of allegations for a combined $22.5 million, bringing the total settlement to $90.5 million.

Bordas alleged in his initial complaint that CenCal — the county organized health system that arranges services for Medi-Cal enrollees in Santa Barbara and San Luis Obispo counties — concocted a fraudulent scheme to make large lump-sum payments to these six medical institutions rather than return excess funds earmarked under the Affordable Care Act to expand Medi-Cal insurance coverage to the poorest of the poor. Under this new program — which Bordas stated expanded Medi-Cal eligibility to 40,000 Santa Barbara and San Luis Obispo residents in 2014 — CenCal was obligated to return 85 percent of all payments received but not spent on this expanded treatment. This amount, Bordas claimed in his initial lawsuit filed in 2018, amounted to “tens of millions of dollars.”

The federal Department of Justice announced last December it intended to intervene in the case, acting as the lead prosecutor. It was then that Dignity Health, which owns Santa...

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