Home Health Service Providers in Oakland and Palm Springs Settle Multi-Million Dollar Whistleblower Action for Falsifying Med-Cal Billing

Our Sacramento and San Francisco based employment law attorneys reported that last week a multi-million dollar settlement in a False Claims Act (“FCA”) whistleblower case.  The allegations in the whistleblower (or relator) complaint alleged that home based service providers Alternative Learning Center of Oakland and Adult Educational Technologies who specialized in treating developmentally disabled individuals submitted claims to Medi-Cal for services that were never actually provided.  In so doing, the fraudulent activity costs the taxpayers millions of dollars since the California Department of Social Services paid for those claims.

Interestingly, the whistleblower was a former employee who claims that she was instructed to falsify records of services that were not performed.  This included fake travel logs and service providers.  The defendants had to pay the U.S. government and the state of California hundreds of thousands of dollars in addition to a million and a half to settle with the government.

Under the FCA, the Judge is entitled to order the defendant to pay triple the actual damages that the jury finds.  In addition, the FCA also permits statutory penalties from $5,500 to $11,000 for each false claim submitted by the defendant.  As result, the whistleblower here will receive 20 percent of the total FCA recovery to the U.S. government and 24 percent of the recovery to the state of California plus attorney’s fees.  This is a just reward for someone who stems out health care fraud.

As the main enforcement arm of the federal government, the Justice Department reviews all cases filed under the FCA.   Then, once the whistleblower case is assessed, the government decides whether it will step in and prosecute or step back and allow the whistleblower to bring the complaint on the government’s behalf.  Here, the Department of Justice decided not to step in and intervene.

The FCA is used to stem out fraud related to billing, staffing, and kickbacks. Examples of these are when financial companies are supposed to abide by state and federal laws and chose to ignore them.  They also bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services.  In addition, financial companies are often fount to illegally bill the government for substandard services by fraudulently certifying otherwise. Alternatively, these companies may realize that they have credit from their services that they have to repay to the government, but the companies do not reimburse the government within the 60 day time frame.  See these blogs for more examples of the FCA.

If you witness any potential false claims in California (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.