California AG settles Medi-Cal/Medicaid fraud case
3 min read
Bloomberg News
A former Los Angeles County physician, a non-profit medical center he founded, a laboratory he co-owned, and an executive at these entities have agreed to pay $10 million to settle allegations that they submitted false claims to Medicare and Medi-Cal by paying illegal kickbacks to marketers and self-referring patients.
California Attorney General Rob Bonta announced Thursday a settlement agreement in the case.
It involved Southern California Medical Center, a non-profit, federally qualified health center that provides healthcare services to underserved patients at six clinics located in Los Angeles County, and R&B Medical Group, a full-service reference and Universal Diagnostic Laboratories (UDL), an esoteric laboratory located in Van Nuys, a city in Los Angeles County.
“When healthcare professionals exploit the Medi-Cal program, which is intended to help the state’s most vulnerable populations, they betray the very principles of the Hippocratic Oath and undermine a program designed to support the elderly, the ill and those in need,” Bonta said in a statement.
Mohammad Rasekhi, who
Rasekhi is the founder and co-owner of UDL. Busheri is the chief executive officer of SCMC and the co-owner and chief executive officer of UDL.
According to the agreement, the alleged violations occurred from Jan. 1, 2014, through August 2022.
The pair violated the anti-kickback statute by retaining and paying third-party marketers on a per-patient basis to refer Medicare and Medicaid beneficiaries to SCMC clinics.
They also submitted claims or caused claims to be submitted to and received payments from Medicare and Medicaid for medical care provided to third-party providers and marketers, who were referred to UDL for laboratory testing.
“The remuneration provided included paying rent without conducting any market valuation and at above fair market value; providing discounts on laboratory services to referring providers and their staff; and writing off balances owed to UDL by referring providers,” according to the settlement agreement.
“Rasekhi, who was the founder and CMO of SCMC and the co-owner of UDL and had financial interest in UDL and was an employee of SCMC, violated the Stark Act by referring his own patients from SCMC to UDL for laboratory tests that were paid for by Medicare and Medicaid,” according to the agreement.
Attorneys who represent the companies and the couple could not be reached for comment.
Medicaid is funded jointly by the states and the federal government. The state of California paid a portion of the Medicaid claims at issue and will receive $4 million and the federal government will receive $6 million from the settlement.
The state’s division of Medi-Cal Fraud and Elder Abuse receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award totaling $69.3 million for federal fiscal year 2025, which runs from Oct. 1, 2024, through Sept. 30, 2025. The remaining 25% is funded by the state.
“The alleged actions of Dr. Rasekhi not only broke the trust of his patients, but also diverted essential resources away from vital healthcare services that benefit the community,” Bonta said. “My office is dedicated to ensuring that integrity and compassion guide the care provided through the Medi-Cal program.”
California collaborated with local, state and federal partners on the case, he said.
“Defendants have reviewed their financial situation and warrant that they are solvent — and shall remain solvent following the payment to the U.S. of the settlement amount,” according to the OAG agreement.
The defendants may be excluded from participating in all federal health care programs until they pay the settlement amount, according to the settlement agreement.
This agreement is neither an admission of liability by defendants, nor a concession by the U.S. or California that their claims are not well founded, according to court documents.
