Four central coast healthcare entities, Cencal Health, Cottage Health System and Sansum Clinic, and Community Health Centers of the Central Coast agreed to pay a total of 68 million dollars to resolve allegations of violating the Federal and California False Claims Act.
The lawsuit stems from a Medi-Cal expansion of qualifying adults in California. The federal government fully funded this expansion coverage for the first three years, so long as the healthcare entities spent at least 85% of the received funds on ‘allowed medical expenses.’
The settlement resolves allegations that the four entities knowingly submitted or caused the submission of false claims for the enhanced services funds. The United States and California alleged the payments were not “allowed medical expenses” permissible under the contract. United States attorney Martin Estrada stated the false claims act provides them with a powerful tool to ensure taxpayer-funded health care programs are used for patient care, and not for financial gain.
