E. Martin Estrada, U.S. Attorney | U.S. Attorney's Office for the Central District of California
Seoul Medical Group Inc., based in Los Angeles' Koreatown, along with its subsidiary Advanced Medical Management Inc., has agreed to pay $58.74 million following allegations of submitting false diagnosis codes to the Medicare Advantage program. The former president and majority owner, Dr. Min Young Cha, will also pay $1.76 million as part of the settlement.
Renaissance Imaging Medical Associates Inc., a radiology group from Northridge, is set to pay $2.35 million for allegedly conspiring with Seoul Medical Group in connection with these false diagnoses.
Acting U.S. Attorney Joseph McNally stated, "The false claims to Medicare resulted in millions of dollars in losses to the government." He added that the $62.85 million settlement aims to recoup those losses and penalize those involved in making false claims.
Acting Assistant Attorney General Yaakov M. Roth emphasized the importance of accuracy in information provided by healthcare providers participating in Medicare Advantage: “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.”
Medicare Advantage, or Medicare Part C, allows beneficiaries to enroll in managed care insurance plans known as MA Plans, which contract with healthcare providers like Seoul Medical Group for services covered by Medicare. Payments are adjusted based on demographic and health diagnoses information.
The United States alleged that between 2015 and 2021, Seoul Medical Group and Dr. Cha submitted false diagnoses for spinal enthesopathy and sacroiliitis for patients not suffering from these conditions. Renaissance Imaging was accused of creating supporting radiology reports upon being questioned about these diagnoses.
Deputy Inspector General Christian J. Schrank commented on the impact of such actions: “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.”
The civil settlement addresses claims brought under qui tam provisions by Paul Pew, former Vice President and CFO of Advanced Medical Management. Under these provisions, private parties can file actions on behalf of the United States and potentially receive a portion of any recovery.
The resolution involved coordination between various divisions within the Justice Department and assistance from Health and Human Services Office of Inspector General (HHS-OIG). The investigation highlights efforts against healthcare fraud using tools like the False Claims Act.
Assistant U.S. Attorney Karen Y. Paik along with Trial Attorneys J. Jennifer Koh and Robbin O. Lee led investigations into this matter.
It is important to note that while these settlements resolve allegations made under the False Claims Act, there has been no determination of liability regarding these claims.
