Clinics and Laboratories in Southern California Settle Allegations of Fraud
December 29, 2024 – WASHINGTON – Southern California healthcare providers, including Dr. Mohammad Rasekhi, Sheila Busheri, Southern California Medical Center (SCMC), and Universal Diagnostic Laboratories (UDL), have agreed to pay $10 million to resolve serious allegations. The claims involved submitting false Medicare and Medi-Cal bills related to kickbacks and self-referrals. SCMC operates six clinics, while UDL serves as a reference and esoteric laboratory in the region. Kickbacks and Self-Referrals
Details of the Allegations
The government alleged that the defendants violated the Anti-Kickback Statute (AKS) and the Stark Act, which govern ethical conduct in federally funded healthcare programs. Specifically, the defendants were accused of:
- Paying marketers to refer Medicare and Medi-Cal patients to SCMC clinics, breaching the AKS.
- Providing kickbacks to other clinics through above-market rents, discounted services, and waived patient balances in exchange for laboratory referrals to UDL.
- Violating the Stark Act by referring patients from SCMC to UDL, a facility they owned, for laboratory tests.
Legal Framework: Understanding the AKS and Stark Act
The AKS prohibits financial incentives for referrals to federal healthcare programs like Medicare and Medicaid. Similarly, the Stark Act restricts physicians from referring patients for “designated health services” payable by federal programs if the physician or their immediate family has a financial interest in the referred entity.
Violating these statutes jeopardizes patient care, distorts clinical decision-making, and undermines trust in federally funded programs. Compliance with both laws is a mandatory condition for receiving federal healthcare payments.
Government Response and Statements
Principal Deputy Assistant Attorney General Brian M. Boynton highlighted the dangers of kickback and self-referral schemes, emphasizing that such practices impair medical judgment and reduce the reliability of care. U.S. Attorney Martin Estrada for the Central District of California reiterated the government’s commitment to protecting federally funded healthcare programs from exploitation.
Key Statements from Officials:
- Acting Special Agent Eric Larson of HHS-OIG noted, “This settlement reminds providers that they must operate with integrity when handling taxpayer-funded healthcare.”
- Special Agent Bryan D. Denny of DCIS emphasized the risks posed to patient care by fraudulent schemes targeting programs like TRICARE.
Role of Whistleblowers and the Qui Tam Complaint
This settlement partially resolves claims brought by whistleblowers under the False Claims Act. Former SCMC and UDL employees, including Ferzad Abdi, Julia Butler, Jameese Smit, and Karla Solis, filed a qui tam lawsuit (United States ex rel. Abdi v. Rasekhi, No. 18-cv-03966, CDCA). Whistleblowers in such cases may receive a share of recoveries, though their specific share remains undetermined.
A separate $5 million agreement settled additional allegations brought by the whistleblowers, which were not part of the federal government’s claims.
Broader Implications for Healthcare Fraud Prevention
The investigation exemplifies the government’s aggressive stance against healthcare fraud, utilizing the False Claims Act as a primary tool. The public is encouraged to report potential fraud to the HHS-TIPS hotline at 800-HHS-TIPS (800-447-8477).
Conclusion
The $10 million settlement highlights the importance of compliance in federally funded healthcare programs. For more updates on legal issues affecting the medical industry, visit MedLegalNews.com.
Source: DOJ Press Release.
