Under the terms of the settlements, Gold Coast Health Plan will pay $17.2 million to the United States; Ventura County will pay $29 million to the United States; Dignity Health, a non-profit hospital system, will pay $10.8 million to the United States and $1.2 million to the State of California; and Clinicas del Camino Real, a non-profit health care organization, will pay $11.25 million to the United States and $1.25 million to the State of California.
Additionally, the U.S. Department of Health and Human Services agreed to release its right to exclude Gold Coast and Ventura in exchange for their agreements to enter into five-year corporate integrity agreements (CIAs). The CIAs require, among other things, that Gold Coast and Ventura County “each implement centralized risk assessment programs as part of their compliance programs and each hire an independent review organization to complete annual reviews,” the Justice Department stated.
Gold Coast’s annual reviews will focus on its calculation and reporting of medical loss ratio data under Medi-Cal, while Ventura County’s annual reviews will target hospital claims submitted to Medicare and Medicaid, including claims submitted to Medicaid managed care organizations.
The three settlements resolve allegations made by the United States and California that, between January 2014 and May 2015, Gold Coast, Ventura County, Dignity, and Clinicas “knowingly submitted or caused the submission of false claims” for payments that were not “allowed medical expenses” under Gold Coast’s contract with California’s Department of Health Care Services; were pre-determined amounts that did not reflect the fair market value of additional services provided; and/or the additional services were duplicative of services already rendered. The United States and California further alleged that the payments were unlawful gifts of public funds in violation of Article IV, Section 17 of the California Constitution, according to the Department of Justice.
“We will pursue every health plan and provider that prioritizes profits over patients,” stated Acting U.S. Attorney Stephanie Christensen for the Central District of California. “The money at issue in this case was designated by the federal government to pay for services to treat Medicaid expansion patients, and it never should have been used to double-pay for services that already had been reimbursed or to pay for services that simply were never provided.”
The civil settlements include the resolution of claims brought under the whistleblower provisions of the FCA by Atul Maithel, Gold Coast’s former controller, and Andre Galvan, Gold Coast’s former director of member services. Maithel and Galvan are expected to receive 18.5 percent of each settlement amount payment, according to the settlement agreement. The whistleblowers also brought claims under California’s state False Claims Act and additionally will receive 24 percent of California’s recovery.
In response to the settlement agreement, Gold Coast maintained in a statement it has done nothing wrong. “Although Gold Coast Health Plan believes that its disbursements to providers under this program were lawful and proper, we agreed to participate in a mediation with the regulators to reach a settlement to prevent an expensive and protracted process,” said Gold Coast Chief Executive Officer Nick Liguori. “The settlement reflects a compromise that will finally and fully resolve this dispute.”
“Regulatory compliance is a cornerstone of our participation in the Medi-Cal program,” Gold Coast Compliance Officer Robert Franco stated. “We have a robust compliance program, and the additional layers of oversight required by the corporate integrity agreement will further strengthen the health plan as we continue to adjust to the ever-evolving regulatory environment.” 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.