Local health systems to pay more than $70 million in settlement over Medi-Cal claims

Gold Coast Health Plan, which runs Medi-Cal health insurance in Ventura County, and three other local health systems will pay $70.7 million in a settlement over allegations of false Medi-Cal claims.

Announced Thursday by the U.S. Department of Justice, the agreement ends a 7-year-old dispute triggered by an increase in Medi-Cal funding designed to provide care to more people. Gold Coast and the other health systems deny the allegations of false claims, agreeing to a settlement reached with the help of a mediator.

In the agreement, publicly funded Gold Coast will pay $17.2 million to the federal government. The County of Ventura, which runs two hospitals and a network of clinics through the County Healthcare Agency, will pay $29 million to the United States.

Dignity Health System, which runs St. John's hospitals in Oxnard and Camarillo, will pay $10.8 million to the federal government and $1.2 million to California. Clinicas del Camino Real, a nonprofit countywide network of clinics, will pay $11.25 million to the feds and $1.25 million to the state.

Gold Coast officials said in a written statement the dispute involved payments for care provided by the local Medi-Cal plan to health systems.

Catch up: COVID-19 infections appear to be headed downhill in Ventura County after months-long climb

“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 Nick Liguori, Gold Coast's chief executive officer. “The settlement reflects a compromise that will finally and fully resolve this dispute.”

Medi-Cal is the federal and state-funded program that provides insurance to low-income residents, including more than 240,000 people in Ventura County. The dispute dates back to the dramatic increase in federal funding and people eligible for Medi-Cal in 2014. The expansion was part of the Affordable Care Act, also known as Obamacare.

Local Medi-Cal systems like Gold Coast were required to return money to the state if they did not spend at least 85% of the funding on allowed medical expenses. The state was required to pass on the money to the federal government.

DOJ officials allege Gold Coast and the local health systems submitted claims for expenses that were not allowed. They alleged some of the services reflected in the claims were not provided, or duplicated care that had already been reimbursed by Medi-Cal.

“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," said Stephanie S. Christensen, acting U.S. attorney for the Central District of California, in a statement.

Gold Coast and the local systems contest the accusations. In its statement, Gold Coast officials said funding was made available to health systems to improve care through services not required under existing contracts.

"The intent of Gold Coast Health Plan’s leadership at that time was to disburse the Adult Expansion Program funds in a lawful and equitable manner,” Liguori said.

In a separate statement, Clinicas officials said they cooperated with the investigation involving alleged overpayments to their system.

“Although we do not believe Clinicas did anything wrong or inappropriate, and we do not believe it was an overpayment, we decided to settle the matter and return the alleged overpayments instead of engaging in costly and time-consuming litigation that would have cost taxpayers," CEO Gagan Pawar said.

California Attorney General Rob Bonta praised the investigation.

Investigation ongoing: Oxnard police release more details about Carmen Ramirez collision

“Medi-Cal props up our communities by providing access to free or affordable healthcare services for millions of Californians and their families. Those who attempt to cheat the system are cheating our communities of essential care,” he said.

Federal officials said the investigation was aided by two people given whistleblower protection, former Gold Coast controller Atul Mathiel and the plan's former director of member services, Andre Galvan. They said the settlement resolved the claims made by the former employees, though details were not disclosed in a news release.

Gold Coast and the County of Ventura will enter a fiv-year corporate integrity agreement program to conduct independent reviews of Medi-Cal claims, federal officials said.

Tom Kisken covers health care and other news for the Ventura County Star. Reach him at tom.kisken@vcstar.com or 805-437-0255.

SUPPORT LOCAL JOURNALISM: To see more stories like this, subscribe here.

This article originally appeared on Ventura County Star: Local health systems to pay $70.7 million in Medi-Cal settlement