Overview: The US government has filed a complaint against Inland Empire Health Plan (IEHP) for allegedly making false statements and retaining overpayments to Medi-Cal, California’s Medicaid Program. The complaint alleges that IEHP violated the False Claims Act by making false statements to Medi-Cal and knowingly retaining overpayments. IEHP’s counsel has called the complaint a “misguided civil legal dispute” and has stated that they look forward to taking the case to court.
Breanna Reeves
The U.S. government has filed a complaint against Inland Empire Health Plan (IEHP) for allegedly making false statements and retaining overpayments to Medi-Cal, California’s Medicaid Program.
According to a press statement released on Sept. 17 by the U.S. Justice Department, the complaint alleges that IEHP violated the False Claims Act by making false statements to Medi-Cal and knowingly retaining overpayments.
“Today’s lawsuit against IEHP shows our steadfast commitment to hold accountable insurers that brazenly compromise the Medicaid system,” stated Acting U.S. Attorney Bill Essayli. “We will take every measure to restore integrity and accountability to the Medicaid system and ensure that patient care – not financial gain – is the primary focus of our health care system.”
Beginning in January 2014, Medi-Cal was expanded to cover the previously uninsured “Medi-Cal Expansion” population: adults between the ages of 19 and 64, without dependent children, with annual incomes up to 133% of the federal poverty level, according to the Justice Department statement. The expansion coverage was fully funded by the federal government for three years.
If IEHP did not spend at least 85% of those funds on “allowed medical expenses,” IEHP was required to pay back to the state the difference between 85% and what it actually spent. California was required to return that amount to the federal government.
The complaint alleges that IEHP constructed a plan to misuse extra Medi-Cal Expansion funding by developing “sham incentive programs” and “an extra-contractual retroactive rate increase.” The complaint accuses IEHP of misspending Medi-Cal Expansion funding for inappropriate purposes, including spending on administrative expenses and other patient populations.
“The complaint further alleges that IEHP was motivated by a desire to conserve its other funding, thus enriching itself,” the statement read.
In response to the lawsuit, IEHP counsel Winston Chan of Gibson, Dunn & Crutcher LLP called the complaint a “misguided civil legal dispute” in an email to Black Voice News.
“The allegations are a brazen attempt at revisionist history that is not only wrong as to the facts and law, but also particularly galling in light of the federal government’s wider attacks on state Medicaid funding. Conspicuously absent from the lawsuit—which the State of California did not join as a co-plaintiff—is any allegation whatsoever that Inland Empire Health Plan or its personnel retained any of the funds in question or that providers serving the neediest Californians did not actually receive every dollar awarded to them,” Chan wrote.
“We look forward to taking this case to court and exposing the mistaken assumptions, flawed reasoning, and false conjecture that is rife throughout the allegations, and ensuring that our client is not distracted from its not-for-profit mission to heal and inspire its 1.5 million underserved members in Riverside and San Bernardino counties,” he added.
IEHP provides services to 1.5 million members and contracts over 8,000 providers as the largest not-for-profit Medicare-Medicaid public health plan in the country, according to their website.
This case is being handled by the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Central District of California, in coordination with the California Department of Justice, and with assistance from the U.S. Department of Health and Human Service’s Office of the Inspector General and the Department of Health Care Services.