Gold Coast (aka Ventura County Medi-Cal Managed Care Commission) to pay $17.2 million to U.S. and California; providers that received allegedly illegal payments – Ventura County Medical Center, Dignity Health, and Clinicas del Camino Real Inc. – will pay an additional $53.5 million

August 19, 2022, San Francisco–(BUSINESSWIRE)–The law firm of Lieff Cabraser Heimann & Bernstein, LLP announces a $70.7 million settlement of a False Claims Act whistleblower lawsuit against Gold Coast Health Plan and certain “favored” medical providers in California, in which Relators alleged that the defendants knowingly misused Medi-Cal funds they received in 2014 and 2015 for newly-enrolled adult Medi-Cal patients under the Affordable Care Act.

“Blowing the whistle on those defrauding the government is critically important,” stated Lieff Cabraser partner Robert J. Nelson, who represented the whistleblowers in the case, “and often requires extreme courage and commitment, especially as here, where it took seven years from the time of the original whistleblowing to the achievement of these substantial, meaningful settlements.”

Under “medical loss ratio” rules, Gold Coast was required to return to the government a certain percentage of monies that it did not ultimately use on health care for this Adult Expansion population. This mechanism allowed the government to adequately fund care for this newly-insured population knowing that any excess amounts would be returned. Instead of returning the funds to the government, relators alleged that Gold Coast distributed a large portion of it to favored providers for so-called “additional services,” which Relators alleged were not actually provided or were duplicative of services for which the providers had already been compensated. Relators further alleged that although Gold Coast claimed it would seek documentation from the providers to justify the payments for these “additional services,” it largely ignored that requirement, and in fact calculated the payments to providers before any documentation of services was provided.

As a result of settlements negotiated with Gold Coast and the favored providers, Gold Coast will pay $17.2 million to the United States and the State of California. The providers who sought and received these allegedly illegal payments – Ventura County Medical Center, Dignity Health, and Clinicas del Camino Real Inc. – will pay an additional $53.5 million, the balance of the total $70.7 million settlement.  The settlement was first made public by the United States Department of Justice and the California Attorney General on August 18, 2022. Lieff Cabraser represented the whistleblowers along with co-counsel Marc Reich at Reich Radcliffe & Hoover LLP.

“False Claims Act violations like those in this lawsuit harm not just the government, but also the patients and providers who rely on these funds to obtain and provide care, and the taxpayers who fund the system,” noted Lieff Cabraser partner Nimish R. Desai, who also represents the plaintiffs-relators in the case. “These extraordinary and extremely hard-won settlements, and the relief they bring, are a huge win for all of us.”

Contemporaneous with the False Claims Act settlement, 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.

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Robert J. Nelson/Nimish Desai
Lieff Cabraser Heimann & Bernstein, LLP
415 956-1000

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