The U.S. Department of Justice is suing Inland Empire Health Plan for allegedly breaking federal law. In the suit filed this week, the DOJ says IEHP hoarded and misused Medi-Cal funding.
The DOJ alleges Inland Empire Health Plan, or IEHP, created schemes to misuse funding through sham incentive programs.
IEHP contracted with the California Department of Health Care Services to distribute health care services to Medi-Cal recipients in Riverside and San Bernardino counties. In 2014, Medi-Cal was expanded to previously uninsured residents between the ages of 19 and 64 without dependent children and annual incomes up to 133% of the federal poverty level. The federal government fully funded the program for the first three years.
The health plan had to spend at least 85% of the funds on allowed medical expenses or pay back the difference between 85% and what it actually spent.
The complaint says IEHP used the money on other populations, administrative costs and just gave some away. IEHP allegedly tried to make the spending look real by making false statements about the nature and timing of payments to the federal government. The DOJ also alleges that IEHP backdated spending to fall during earlier time periods and disguised other payments to look like they were part of an incentive program with providers. According to the complaint, those payments allegedly were not allowed under the contract between DHCS and IEHP.
In an email to KVCR, Winston Chan, an attorney for IEHP, called the lawsuit “misguided” and said the government is contesting Medi-Cal payments made a decade ago that were disclosed and approved by regulators. He said the state of California did not join the case, and there is no allegation IEHP or its personnel kept any funds in question.
Meanwhile, a spokesperson for DHCS said the agency does not comment on pending litigation.
