Seoul Medical Group to Pay $62.85M for False Medicare Claims Violations
TL/DR –
Seoul Medical Group and Advanced Medical Management, along with their former president Dr. Min Young Cha, have agreed to pay over $60 million to settle allegations of violating the False Claims Act. The medical companies were accused of submitting false diagnosis codes for two spinal conditions to increase payments from the Medicare Advantage program. Renaissance Imaging Medical Associates likewise agreed to pay $2.35 million for allegedly collaborating with Seoul Medical Group in connection with the false diagnoses.
Seoul Medical Group and Advanced Medical Management to Pay $58.74M for False Claims Act Violation
Los Angeles-based Seoul Medical Group and its subsidiary, Advanced Medical Management, have agreed to pay a $58.74 million settlement over allegations of submitting false spine condition diagnosis codes to increase payments from the Medicare Advantage program, violating the False Claims Act. The former president and majority owner of the group, Dr. Min Young Cha, separately agreed to pay $1.76 million.
Renaissance Imaging Medical Associates to Pay $2.35M Over Alleged Conspiracy
Renaissance Imaging Medical Associates, a collaborating radiology group, will also pay $2.35 million for allegedly conspiring with the Seoul Medical Group in submitting these false diagnoses.
The Acting U.S. Attorney stated that these false claims resulted in significant monetary losses to the government. However, with the $62.85 million settlement, the losses have been recouped, with the healthcare providers paying millions more in damages.
Medicare Advantage Program: A Vital Component for Seniors
Acting Assistant Attorney General emphasized the importance of Medicare Advantage for seniors, expecting healthcare providers to provide accurate information. This sends a clear message to the healthcare community against knowingly submitting false claims on taxpayer funds.
The Medicare Advantage, or Medicare Part C program, allows beneficiaries to enroll in managed care insurance plans known as Medicare Advantage Plans (MA Plans), and these MA Plans contract with healthcare providers like Seoul Medical Group.
The Role of Risk Scores in Medicare Payment
The Centers for Medicare and Medicaid Services (CMS) adjusts the payments to MA Plans based on demographic and health diagnosis of each plan beneficiary, known as “risk scores.” The higher the risk score, the larger the risk-adjusted payment to the MA Plan.
Seoul Medical Group’s History and Alleged False Diagnoses
Founded in 1993 by Dr. Cha, Seoul Medical Group expanded to six states and at times employed 150 primary care providers and 1,000 specialists. It was alleged that from 2015 to 2021, Seoul Medical Group and Dr. Cha submitted false diagnoses for two severe spinal conditions, spinal enthesopathy and sacroiliitis, for patients who did not have these ailments. This led to increased CMS payments to the MA Plan, a portion of which was passed to Seoul Medical Group.
Whistleblower Provisions of the False Claims Act
The civil settlement resolves claims brought under the whistleblower provisions of the False Claims Act by Paul Pew, the former CFO of Advanced Medical Management. Under these provisions, a private party can file an action on behalf of the U.S. and receive a portion of any recovery.
This investigation and resolution show the government’s emphasis on combating healthcare fraud. The False Claims Act is one of the most powerful tools in this effort, and potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
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