San Diego’s Arch Health Pays $2.9 Million to Resolve False Claims Act Allegations
NEWS RELEASE SUMMARY – January 23, 2020
SAN DIEGO – Arch Health Partners, Inc. (“Arch Health”) has agreed to pay the United States $2,910,370 to resolve allegations that it violated the False Claims Act by submitting false claims to Medicare. Arch Health is a San Diego-based medical organization that contracts with physician groups to provide care through the Palomar Health system.
The United States alleged that Arch Health violated the False Claims Act by submitting claims for federal reimbursement for medical evaluation and management services absent sufficient documentation regarding the nature and complexity of the services provided. Those particular allegations were originally self-disclosed by Arch Health and were also brought in a lawsuit filed by a former employee of Arch Health, Catherine Jones, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud against the government to bring suit on behalf of the government and to share in any recovery. Ms. Jones will receive $183,830 of the settlement proceeds. The United States also alleged, based on certain self-disclosures by Arch Health, that it paid compensation to referring physicians and physician groups that was above fair market value in violation of the Anti-Kickback Act, the Stark Statute, and, by extension, the False Claims Act.
“Improper billing practices and unlawful financial arrangements with referring health care providers present serious program integrity concerns,” said United States Attorney Robert S. Brewer, Jr. “This civil settlement confirms our commitment to civil health care fraud enforcement as a key component of the mission of our office. We also commend the whistleblower for coming forward and working with our investigators.”
“When companies falsely claim payment for services, taxpayers and government health programs are both victimized,” said Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue working with our law enforcement partners to hold accountable those who would harm these programs.”
“This $2.9 million dollar settlement demonstrates how these violations have a significant and direct economic impact on the health care industry,” said FBI Special Agent-in-Charge Scott Brunner. “Our priority is to protect consumers and hold accountable those in the healthcare system who misuse government health programs.”
The investigation was conducted by the United States Attorney’s Office for the Southern District of California, the U.S. Department of Health and Human Services’ Office of Inspector General, and the Federal Bureau of Investigation. U.S. Attorney Brewer commended the excellent work by AUSA Glen Dorgan of the office’s Civil Division, whose diligence was a major factor in resolving this matter.
This case is captioned United States ex rel. Jones v. Arch Health Partners, Inc., et al., Case No. 3:17-cv-0090-MMA-BLM, and the matter was handled by Assistant U.S. Attorney Glen F. Dorgan of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office.