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WASHINGTON, D.C. The State of California and the County of Los Angeles will pay the United States $73.3 million to settle allegations that they violated the False Claims Act with respect to claims submitted to Medicaid, the Justice Department and the United States Attorney's Office in San Francisco announced today.

The settlement resolves allegations that the state and the county directly or indirectly billed the federal health care program for services provided to certain minors when these jurisdictions had no basis for concluding that these individuals financially qualified for Medicaid services. The services at issue in this matter involve drug and alcohol abuse, pregnancy and pregnancy related services, family planning, sexual assault treatment, sexually transmitted diseases and mental health services.

"The Department of Justice places a high priority on ensuring that the United States is not billed for health care services that do not legally qualify for federal reimbursement," said Assistant Attorney General Robert D. McCallum, Jr., head of the Department's Civil Division.

The civil settlement includes the resolution of claims brought against the state and the county by Gurubanda Singh Khalsa, an employee of the Los Angeles Department of Mental Health, under the qui tam or whistleblower provisions of the False Claims Act. Khalsa will receive approximately $1.36 million of the total recovery as his statutory award. Under the qui tam provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the settlement if the government takes over the case and reaches a monetary agreement with the defendants.

"The U.S. Attorney's Office in Northern California is committed to safeguarding the limited federal funds that are available under Medicaid and other health care programs," said David W. Shapiro, United States Attorney for the Northern District of California.

Medicaid is a jointly-funded, federal-state health insurance program for certain low-income and needy people. It covers approximately 36 million individuals including children, the aged, blind, and/or disabled, as well as people who are eligible to receive federally assisted income maintenance payments.

The case was investigated by the United States Department of Health and Human Services' Office of the Inspector General (HHS-IG) in Santa Ana, California, and the Health Care Fraud Squad of the Federal Bureau of Investigation's San Francisco Division. Additionally, audit support was provided by the HHS-IG's office in San Diego, California. The case was handled by the United States Attorney's Office for the Northern District of California and the Civil Division of the Department of Justice.