RANCHO CUCAMONGA, CA – The United States has filed a civil complaint under the False Claims Act against Inland Empire Health Plan (IEHP), a local initiative health plan based in Rancho Cucamonga, for allegedly submitting false statements and retaining overpayments related to California’s Medi-Cal Expansion program.
IEHP, which contracted with California’s Department of Health Care Services (DHCS) to provide services to residents in Riverside and San Bernardino counties, is accused of violating the False Claims Act by misusing surplus federal funds and concealing the nature of the spending from state and federal agencies.
Beginning in 2014, IEHP received full federal funding to serve the Medi-Cal Expansion population. Under the terms of its agreement, IEHP was required to spend at least 85% of received funds on “allowed medical expenses,” returning any unspent portion to the state, which would then return it to the federal government.
According to the complaint, IEHP devised two main schemes: implementing sham incentive programs and retroactively increasing rates outside of contractual terms. These actions allegedly allowed IEHP to divert Medi-Cal funds to cover unrelated administrative costs, other patient populations, and payments providing no return value.
Federal prosecutors claim IEHP attempted to legitimize these expenditures by making false representations to DHCS, including characterizing improper provider payments as performance incentives and disguising consulting and technology expenses as incentive disbursements.
“Today’s complaint demonstrates our continued commitment to protect the integrity of the Medicaid program,” said Deputy Assistant Attorney General Brenna Jenny of the Justice Department’s Civil Division. Acting U.S. Attorney Bill Essayli added that the lawsuit represents a “steadfast commitment to hold accountable insurers that brazenly compromise the Medicaid system.”
The case is being prosecuted by the DOJ Civil Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California, with assistance from the California Department of Justice, HHS-OIG, and DHCS.
Reports of fraud, waste, or abuse can be submitted to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
