Community Health Centers of the Central Coast, Inc.
Outcome
Community Health Centers of the Central Coast paid $3.5 million (federal and state combined) as part of a $68 million multi-entity Medi-Cal fraud settlement resolving False Claims Act allegations that the FQHC submitted false claims for Enhanced Services to Adult Expansion Medi-Cal members that were not allowed medical expenses, were predetermined amounts not reflecting fair market value, and were duplicative of services already required under its contract.
Details
Community Health Centers of the Central Coast, Inc. — Medi-Cal Enhanced Services False Claims (2023)
Outcome: Community Health Centers of the Central Coast, Inc. (CHC), a federally qualified health center operating in Santa Barbara and San Luis Obispo Counties, paid $3.15 million to the United States and $350,000 to the State of California as part of a broader $68 million Medi-Cal fraud settlement covering false claims for Enhanced Services submitted to California's Medicaid Adult Expansion program.
Community Health Centers of the Central Coast, Inc. is a nonprofit FQHC operating multiple clinic locations in Santa Maria and surrounding communities in Santa Barbara and San Luis Obispo Counties, California, providing primary care, dental, and behavioral health services to underserved and Medi-Cal-eligible populations.
The settlement, announced in June and July 2023, resolved allegations that CHC knowingly submitted or caused the submission of false claims to Medi-Cal pursuant to agreements with CenCal Health, the county-organized health system operating as the Medi-Cal managed care plan for the region. CHC billed for Enhanced Services purportedly provided to Adult Expansion Medi-Cal members enrolled under the Affordable Care Act's Medicaid expansion during the period January 1, 2015 to June 30, 2016.
The United States and California alleged that the Enhanced Services payments were not "allowed medical expenses" under the contract between the California Department of Health Care Services (DHCS) and CenCal; that the payment amounts were predetermined and did not reflect the fair market value of any services actually provided; and that in some instances the Enhanced Services were duplicative of services CHC was already contractually required to render to Medi-Cal members.
The case arose from a qui tam lawsuit filed by Julio Bordas, M.D., the former medical director of CenCal Health, who became aware of the billing practices during his tenure and brought them to the attention of federal and state authorities. CHC's portion of the settlement was one component of the $68 million multi-entity resolution; the other settling parties were CenCal Health ($49.5 million), Cottage Health System ($10 million), and Sansum Clinic ($5 million). Across all entities, the United States recovered approximately $95.5 million in connection with this investigation.
How Crucible Prevents This
Crucible contract compliance controls would require that all Enhanced Services claims submitted to a managed care plan be reconciled against the contract's definition of allowable medical expenses and documented at fair market value before submission. A Medicaid Adult Expansion billing review gate would flag predetermined capitated-style add-on payments that are not supported by documented service delivery. Duplicate service detection logic would identify Enhanced Services claims that overlap with services already required under the provider's base contract, preventing double-reimbursement submissions.
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