Attorney General Bonta Secures $22.5 Million Settlement for Fraud

On December 7, 2022, Dignity Health and Tenet Healthcare Corporation agreed to pay $22.5 million for two separate settlements. Let’s explore the settlement details with Ehline Law and our personal injury attorneys.

Two Settlements Resolve Allegations Against Dignity and Tenet Health Corporation Medical Providers

California Attorney General Rob Bonta worked with the California Department of Justice (DOJ) to punish two companies, Dignity Health and Tenet Health Corporation,

The companies violated the state and federal False Claims Act by sending fraudulent claims to Medi-Cal.

Medical Providers Abuse the Extended Funds Allocated under the Affordable Care Act

Under the Affordable Care Act, the federal government expanded funds for broadening Medi-Cal benefits. In 2014, the government ramped up its funding for Medi-Cal to incorporate the adult population, those between 19 and 64, without dependent children and earning under a certain income bracket.

The federal government fully funded the Medi-Cal program for three years. It overfunded it to provide a cushion for any medical needs of the newly incorporated adult population. However, the two defendants created a scheme to secure as many benefit payments as possible by submitting fraudulent claims.

The United States Department of Justice Office and the United States Attorney’s Office in Los Angeles extended their support in helping with the fraudulent claim investigations to hold the companies responsible for taking advantage of the healthcare system at the expense of patients.

California Department of Justice Ready to Crackdown on Abusers of Federal Programs

Michael D. Granston, Deputy Assistant at the Justice Department’s Civil Division, stated that healthcare abuse burdens the taxpayer and undermines Medicaid’s integrity. He said that the massive $22.5 million and legal actions against those who abuse the federal health care programs to make profits is a deterrence for other providers.

This isn’t the first lawsuit against Tenet for defrauding the United States. In 2016, the court ordered the medical provider and two subsidiaries to pay $513 million to resolve criminal charges and civil claims. In the statement released by the United States Justice Department, Tenet defrauded the federal government and paid kickbacks and bribes in violation of the Anti-Kickback Statute.

Many legal advocates believe that the government should take strict action against such medical providers as it clearly seems that they’re profiting much more than it is paying in settlements, hence the constant violations by the company.

The US Attorney for the Central District of California reiterated the commitment and resolve of the California Department of Justice to hold accountable health care providers who abuse the Medicaid program and waste taxpayer funds.

Companies that provide health care services and exploit critical Medicaid funding are depriving the patients who need such financial support to pay for medical expenses. Major settlements demonstrate that the DOJ is ready to crack down and punish those who deny others for their own financial gain.

Multiple Government Agencies Worked Together to Pursue Providers Suspected of Falsifying Claims

In 2015, the California Department of Health reached out to Dignity Health, Twin Cities Community Hospital (Twin Cities), and Sierra Vista to provide medical services in Santa Barbara County and San Luis Obispo County. Tenet operated the two medical providers: Twin Cities and Sierra Vista.

The agreement involved a condition where the defendants would return the surplus fund to the state if they did not spend 85% of the received benefits under the Medi-Cal Adult Expansion program.

Between February 1, 2015, to June 30, 2016, Dignity and between January 1, 2014, to April 30, 2015, Twin Cities and Sierra Vista provided healthcare services. During these periods, the healthcare providers falsified claims to receive payments, violating the state’s constitution.

Special Agent, Timothy B. DeFrancesca, confirmed that the law enforcement partners worked closely with the Health and Human Services to find evidence of fraudulent claim practices and hold them accountable for stealing from the nation and the needy.

Whistleblower Exposes the Malpractice under California False Claims Act

A whistleblower, Julio Bordas, the former Medical Director of CenCal, under the California False Claims Act, brought a civil action against the medical providers. The Act provides a financial incentive for the whistleblowers in the form of a portion of the recovered amount.

In the massive $22.5 million settlement bust, several government agencies worked with the whistleblower to collect evidence and hold the two medical providers accountable for the damages caused to the public funds.

The Breakdown of the $22.5 Million Settlement

The following is the breakdown of the $22.5 million settlement that the companies must pay to the federal and state government:

• Dignity – $13.5 million to the federal government and $1.5 million to California
• Twin Cities and Sierra Vista operated under Tenet Healthcare Corporation – $6.75 million to the federal government and $750,000 to California.

Schedule a Free Consultation with Ehline Law Products Lawyers

If you suffered injustice or were unfairly treated by a medical provider, contact us at (833) LETS-SUE for a free consultation, as you may be eligible for compensation.