OAKLAND — California Attorney General Rob Bonta, in partnership with the U.S. Department of Justice, today announced a $3.8 million settlement with a Riverside skilled nursing facility, Alta Vista Healthcare & Wellness Centre (Alta Vista), and its management company, Rockport Healthcare Services (Rockport), to resolve allegations of Medi-Cal fraud. The defendants are accused of violating the federal Anti-Kickback Statute and False Claims Act, as well as the California False Claims Act, by paying illegal kickbacks to doctors to encourage them to refer Medicaid and Medi-Cal patients to Alta Vista. As part of this settlement, the United States will receive $2.8 million and California will receive $596,700, based on the proportion of losses to state and federal funds.
“Decisions that affect patient health should be made solely on the basis of a patient’s best interest,” said Attorney General Bonta. “When a healthcare company cheats and offers kickbacks to gain an unfair advantage, it jeopardizes the health and well-being of those who rely on its services. These illegal schemes also make public services and programs costlier, and ultimately waste valuable taxpayer dollars. Today, I thank the U.S. Department of Justice for teaming up with the California Department of Justice on this case. This settlement demonstrates our commitment to protecting the integrity of Medi-Cal, and the taxpayer dollars that support the program."
“Kickbacks can impair the independence of physician decision-making and waste taxpayer dollars,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the U.S. Justice Department’s Civil Division. “The Department is committed to preventing illegal financial relationships that undermine the integrity of our public healthcare programs.”
The settlement is a result of an investigation by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA), the United States Attorney’s Office for the Central District of California and the U.S. Department of Justice. Investigators found evidence that from January 2009 through December 2019, Rockport and Alta Vista paid illegal kickbacks, in the form of cash, gifts, and salaries, to certain Riverside-area doctors to induce them to refer Medi-Cal and Medicare beneficiaries to Alta Vista, in violation of the federal Anti-Kickback Statute. These referrals resulted in millions of dollars in Medicare and Medi-Cal reimbursement to Alta Vista and Rockport. Inducing or rewarding doctors to steer or refer Medi-Cal and Medicare patients is unlawful under both California and federal law because it can lead to over-utilization of publicly-funded health care services, increased costs for public programs, corruption in medical decision-making, and unfair competition.
DMFEA protects Californians by investigating and prosecuting those who defraud the Medi-Cal program as well as those who commit elder abuse. These settlements are made possible only through the coordination and collaboration of governmental agencies, as well as the critical help from whistleblowers who report incidences of abuse or Medi-Cal fraud at oag.ca.gov/dmfea/reporting
DMFEA receives 75% of its funding from HHS under a grant award totaling $53,792,132 for federal fiscal year 2022-2023. The remaining 25% is funded by the State of California. The federal fiscal year is defined as through September 30, 2023.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
A copy of the settlement agreement is available here.