Health Plan Pays Nearly $320 Million for Wrongfully Retaining Overpayment of Medicaid Funds

Because of a 2009 amendment to the False Claims Act, a healthcare provider violates the so-called “Reverse False Claims Act provision” when it wrongfully retains an overpayment of Government Healthcare funds. Importantly, FCA liability attaches even when the Defendant originally obtained the funds because of a mistake or an error; liability is triggered when the Defendant discovers the overpayment and makes the decision to keep the funds.

Recently, the federal government and the State of California announced a $320 million recovery from a health plan that allegedly made the decision to wrongfully keep hundreds of millions of Medicaid dollars that were originally received because of an “actuarial error.” Specifically, SCAN Health Plan incorrectly received overpayments from Medi-Cal, California’s Medicaid program, for more than two decades. The errors were identified and corrected internally in 2009, but the company failed to return the previously received funds.

The allegations came to light because of a qui tam relator who was employed by the company. The relator filed a qui tam lawsuit after the company decided to move forward without returning funds to the government.

More information for whistleblowers is located at the Nolan & Auerbach, P.A. website.