A California medical group and the radiology group it worked with agreed to pay a multi-million dollar settlement to resolve accusations they violated the False Claims Act by submitting false diagnosis codes for two spinal conditions to obtain a bigger payout from the Medicare Advantage program.
Seoul Medical Group Inc. and its wholly-owned subsidiary Advanced Medical Management Inc., which is headquartered in the Koreatown area of Los Angeles, will pay $58.74 million, and their former president, Dr. Min Young Cha, will pay $1.76 million for the alleged violations.
In addition, the Department of Justice (DOJ) said Renaissance Imaging Medical Associates Inc., a Northridge-based radiology group that worked with Seoul Medical, has also agreed to pay $2.35 million for allegedly conspiring with Seoul Medical Group in connection with the false diagnoses for the two spinal conditions.
"Today’s result sends a clear message to the Medicare Advantage community that the United States will zealously pursue appropriate action against those who knowingly submit false claims for taxpayer funds,” said Acting Assistant Attorney General Yaakov M. Roth of the Justice Department’s Civil Division in the announcement.
DOJ alleges that, from 2015 to 2021, Seoul Medical Group and Dr. Cha submitted diagnoses for two severe spinal conditions, spinal enthesopathy and sacroiliitis, for patients who did not suffer from either of these conditions. When Seoul Medical Group was questioned by a Medicare Advantage plan about its use of spinal enthesopathy, Seoul Medical Group enlisted the assistance of Renaissance Imaging Medical Associates to create radiology reports that appeared to support the spinal enthesopathy diagnosis. Both diagnoses resulted in an increase in payment from Centers for Medicare & Medicaid Services to the health plan. The Medicare Advantage plan then passed along a portion of the increased payment to Seoul Medical Group.
“Providers who game the Medicare program to increase profit undermine the foundation of care and diminish patient trust in the nation’s public health care system,” said Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG will continue to collaborate with our law enforcement partners and rigorously probe false claims to the fullest extent possible.”
The civil settlement also resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by Paul Pew, the former vice president and chief financial officer of Advanced Medical Management.