SLO County Hospitals to pay millions for alleged false billing

December 8, 2022

By KAREN VELIE

San Luis Obispo County hospitals agreed to pay portions of a $22.5 million to resolve allegations that they violated federal and state law by submitting false claims to Medi-Cal, federal  prosecutors announced this week.

Dignity Health, which operates three hospitals and one clinic in Santa Barbara and San Luis Obispo counties, entered into  an agreement with the United States and the California to settle allegations of wrongdoing. Twin Cities Community Hospital and Sierra Vista Regional Medical Center, two acute healthcare facility subsidiaries of Tenet Healthcare Corporation, also agreed to pay settlements related to alleged false billing.

In Jan. 2014, Medi-Cal was expanded to cover previously uninsured adults between the ages of 19 and 64 without dependent children and with annual incomes up to 133% of the federal poverty level. The settlements are related to alleged false claims under this program.

The two settlements resolve allegations that Dignity, Twin Cities and Sierra Vista knowingly caused the submission of false claims to Medi-Cal between Feb. 1, 2015 and June 30, 2016, and that Twin Cities and Sierra Vista purportedly made between Jan. 1, 2014 and April 30, 2015.

The United States and California alleged that the payments were not “allowed medical expenses;” were pre-determined amounts that did not reflect the fair market value of services provided; and/or the services were duplicative of services already rendered.

As a result of its settlements, Dignity will pay $13.5 million to the United States and $1.5 million to the State of California. Twin Cities and Sierra Vista have agreed to pay $6.75 million to the United States and $750,000 to the State of California.

“These health care providers siphoned critical Medicaid funding for their own gain instead of using it to provide health care services to patients most in need,” said United States Attorney Martin Estrada. “These major settlements demonstrate our commitment to hold accountable health care providers that seek to exploit the Medicaid program and harm the American taxpayer.”

The whistleblower in this case, Julio Bordas, was the former medical director of the  county organized health system that contracted with Dignity, Twin Cities and Sierra Vista for the provision of health care services under Medi-Cal. For reporting the issue, Bordas will receive $3.9 million as his share of the federal recovery.