DOJ secures $62 MILLION settlement from California medical group over Medicare fraud

California-based healthcare company Seoul Medical Group Inc, as well its subsidiary Advanced Medical Management Inc, will be paying out over $62 million in a settlement secured by the Trump administration's Department of Justice. The company was accused of allegedly submitting false diagnosis codes for spinal conditions in order to get higher payments from the Medicare Advantage program.

According to a press release from the Department of Justice, Seoul Medical Group Inc will be paying out $58,740,000 of the settlement and Dr. Min Young Cha, the company's former president and majority owner, has agreed to pay $1,760,000 of the settlement.

The release from the DOJ stated, "Allegedly, from 2015 to 2021, Seoul Medical Group and Dr. Cha submitted diagnoses for two severe spinal conditions, spinal enthesopathy and sacroiliitis, for patients who did not suffer from either of these conditions."

In addition to this, when the group was questioned about the diagnosis, the healthcare group had Renaissance Imaging Medical Associates allegedly "create radiology reports that appeared to support the spinal enthesopathy diagnosis." With the reports, the healthcare company was able to get higher payments from the Medicare program through the Centers for Medicare and Medicaid Services.

Acting Assistant Attorney General Yaakov M. Roth said, “Medicare Advantage is a vital program for our seniors and the government expects healthcare providers who participate in the program to provide truthful and accurate information. Today’s result sends a clear message to the Medicare Advantage community that the United States will zealously pursue appropriate action against those who knowingly submit false claims for taxpayer funds."

The suit was brought under whistleblower provisions of the False Claims Act by Paul Pew, who is the former Vice President and Chief Financial Officer of Advanced Medical Management. With the provision, a company can file a suit on behalf of the US and get a portion the damages.