[co-author: Stephanie Kozol]
California Attorney General Rob Bonta, in partnership with the Department of Justice, announced two settlements with providers for Medi-Cal (California’s Medicaid program), following allegations under state and federal false claims acts that the providers submitted fraudulent claims to the government from 2014 through 2016. Consequently, Dignity Health, Twin Cities Community Hospital, and Sierra Vista Regional Medical Center agreed to pay a total of $22.5 million to resolve the investigation. The settlement also resolved a whistleblower complaint against the providers, and the whistleblower will receive $3.9 million for his role in uncovering the alleged fraud.
The alleged fraud arose out of a 2014 Affordable Care Act (ACA) expansion to provide health care coverage to a population of low-income adults. Under the expansion, the government provided more funds to the providers than it anticipated that the providers would need to support the program in its initial stages. The providers were required to return surplus funds to the state of California if they did not spend at least 85% of the funds to support increased coverage for this population. The government alleged that Dignity, Twin Cities, and Sierra Vista submitted receipts for incurred expenses in excess of the amounts authorized under the ACA and/or duplicative services already rendered (i.e., overbilling) in efforts to avoid returning the unspent public funds.
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