Attorney General Bonta Announces Settlement Resolving Medi-Cal Fraud Allegations Against Prism Enterprises

Prism serves the surrounding areas of Los Angeles, San Diego, and the Inland Empire 

OAKLAND – California Attorney General Rob Bonta today announced a settlement against Southern California medical provider Prism Enterprises, Inc. (Prism) for submitting false claims for payment to the Medi-Cal Program in relation to services for children and young adults with autism spectrum disorders. Prism contracted with several Medi-Cal managed care organizations to provide treatment services to children and young adults diagnosed with autism spectrum disorders, as well as to provide training sessions to the children’s parents and caregivers. Under the settlement, Prism will pay a total of $650,000 to the state and federal governments, with California receiving a gross share of $390,000. The settlement is based on Prism’s ability to pay. 

“Prism had the important responsibility of supporting and caring for children and young adults with autism spectrum disorders,” said Attorney General Rob Bonta. “Instead of fulfilling its obligation to the families under its care, Prism is alleged to have filed false claims and misused state taxpayer money. These allegations are shameful and these families deserved respect and dignity, not to be used to cheat state resources. I am grateful to the U.S. Attorney’s Office for their involvement in this investigation, which helped bring justice to these families and California taxpayers. My office will continue to hold accountable bad actors who hurt the health and well-being of Californians.”

“Billing Government health care programs for services not rendered negatively impacts the entire health care system,” said U.S. Attorney Randy S. Grossman. “This settlement shows our continuing commitment to protect the integrity of government health care programs and other taxpayer-funded programs. We commend the whistleblower in this case for coming forward, and the team of federal and state agency partners and Assistant United States Attorneys for their work on this case.”

The resolution stems from a 2019 lawsuit filed in the U.S. District Court for the Southern District of California under the qui tam or whistleblower provisions of the California and federal False Claims Acts. The acts permit private parties to file suit on behalf of both the State of California and the United States for false claims and to share in a portion of the governments’ recoveries. The case, United States and the State of California, ex rel. Diana Mason v. Prism Autism Foundation, was filed by Mason, a licensed board-certified behavioral analyst, who was employed by Prism from March 2018 to June 2018 when she observed Prism’s alleged fraudulent activities. Mason, who did not participate in the misconduct, quit working for Prism because the alleged fraudulent activities continued to occur even after she reported the problems to Prism’s owner. She will receive $78,000 as her share from the California settlement.

After the whistleblower lawsuit was filed in 2019, a collaborative investigation by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA) and the U.S. Attorney’s Office for the Southern District of California identified 2,363 fraudulent claims that Prism submitted for canceled appointments, no-shows, and rescheduled appointments from September 2016 to December 2019. For example, Prism submitted claims for caregiver training sessions while the comment section in the patient’s medical record noted that the autistic child’s caregiver was out of the country on the dates the services were supposedly rendered. Training sessions are provided by a therapist to teach the parents and caregivers how to interact with their autistic children to promote social interaction skills, manage problem behaviors, and teach daily living skills and communication. 

Through the DMFEA, the California Department of Justice works to protect Californians by investigating and prosecuting those who perpetrate fraud on the Medi-Cal program. DMFEA also investigates and prosecutes those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state. The Division regularly works with whistleblowers and law enforcement agencies to investigate and prosecute crime, and urges the public to report Medical fraud and abuse at  oag.ca.gov/dmfea/reporting.

DMFEA receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award totaling $50,522,020 for federal fiscal year 2021-2022. The remaining 25% is funded by the State of California. The federal fiscal year is defined as October 1, 2021, through September 30, 2022. 

 A copy of the settlement is available here.