Ventura County CA, 3 Others Will Pay $70.7M to Resolve 'Organized Scheme' to Defraud Medi-Cal

The settlements involve Gold Coast Health Plan, and Medi-Cal providers Dignity Health, Clinicas del Camino Real, Inc.

Ventura County and three healthcare organizations will pay California and the federal government $70.7 million to resolve whistleblower allegations of an "organized scheme" to bilk Medi-Care, state and federal prosecutors have announced.

Along with Ventura County -- the owners of Ventura County Medical Center – the three settlements include Gold Coast Health Plan, and Medi-Cal providers Dignity Health, Clinicas del Camino Real, Inc.

Prosecutors allege the providers "submitted false claims in an organized scheme to illegally keep federal funds intended for Medicaid Adult Expansion under the Affordable Care Act. California will get $2.45 million of the settlement, plus accrued interest."

"Medi-Cal props up our communities by providing access to free or affordable healthcare services for millions of Californians and their families,” California Attorney General Rob Bonta says in a media release. "Those who attempt to cheat the system are cheating our communities of essential care."

Starting in 2014, Medi-Cal expanded to cover uninsured adults without dependent children with annual incomes up to 133% of the federal poverty level. The feds, who fully funded the expansion for its first three years, intentionally overfunded to provide a cushion to cover additional medical needs for the newly insured population.  

Gold Coast's contract with the state stipulated that if it did not spend at least 85% of what it received for the AE population on eligible services, the surplus money would be returned to Medi-Cal, which would return that money the federal government.  

Ventura County will pay the federal government $29 million, Gold Coast will pay $17.2 million, Dignity will pay $10.8 million to the federal government and $1.2 million California, and Clinicas will pay $11.25 million to the feds and $1.25 million to the state.

The settlements are the results of a whistleblower lawsuit filed by Atul Maithel, Gold Coast's former controller, and Andre Galvan, Gold Coast's former director of member services.

Dignity Health Denies Allegations

Dignity Health issued a statement saying it "denies all of the allegations and resolves the matter expressly without conceding any liability."

"During the period January 1, 2014 through May 31, 2015, Dignity Health d/b/a St. John’s Regional Medical Center and St. John's Pleasant Valley Hospital provided critically necessary population health management and related services to this newly-eligible adult Medi-Cal population in Ventura County.  The hospitals provided these services in addition to the underlying services agreement between the hospitals and Gold Coast Health Plan, the county organized health system responsible for administering the Medi-Cal program in Ventura County, and received fair market value compensation for the services actually provided to this vulnerable population.

"Dignity Health denies all of the allegations and resolves the matter expressly without conceding any liability. Dignity Health continues to maintain that all the reimbursement received was properly utilized in serving Ventura County's Medi-Cal beneficiaries.  Consistent with their mission, these hospitals continue to both serve the Medi-Cal population in Ventura County and innovate in the areas of prevention, education, and case management services."