On March 26, the following four entities agreed to pay roughly $62 million to settle a whistleblower’s allegations under the False Claims Act:

• Seoul Medical Group (SMG), a medical practice that has operated in various states, including California, and is headquartered in Los Angeles’ Koreatown neighborhood, and its subsidiary, Advanced Medical Management, which provides healthcare operational services, who combined paid over $58 million of the $62 million settlement;
• The companies’ former president and majority owner, Dr. Min Young Cha, who agreed to pay about $1.8 million; and
• Renaissance Imaging Medical Associates, a radiology group that worked with SMG, which agreed to pay about $2.4 million.

The allegations resolved in the case are that during the six-year period from 2015 to 2021, SMG submitted false diagnosis codes for two severe spinal conditions, spinal enthesopathy and sacroiliitis, which are notably expensive to treat and have a high risk score, in order to increase payments under Medicare Part C.

Because SMG treated many Medicare Advantage (MA) beneficiaries, these allegedly false codes caused higher outlays from the Centers for Medicare & Medicaid Services (CMS), since, in Medicare Advantage, the government payments are in part determined by the health status of the population, and patients with severe conditions like spinal enthesopathy and sacroiliitis garner a larger risk-adjusted payment from the MA Plan for those beneficiaries.

A portion of the MA...

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