SACRAMENTO, Calif. (Legal Newsline) - California Attorney General Kamala Harris said Thursday her office has reached a $323.67 million settlement with a Los Angeles-based health maintenance organization over excess Medi-Cal and Medicare payments.

SCAN Health Plan, Senior Care Action Network and Scan Group -- collectively known as SCAN -- provide health care and support services in Southern California to the elderly and disabled.

The settlement with SCAN -- which resolves California's allegations that SCAN failed to provide contractually required financial information to the state Department of Health Care Services -- constitutes the largest Medi-Cal recovery in the state's history, according to the Attorney General's Office.

"Californians have lost millions of dollars that should have been going toward the health care of our most vulnerable citizens," Harris said in a statement.

"This settlement will bring a significant amount of those funds back to the state when it is dearly needed, and I commend all of those involved in this action."

Medi-Cal is California's version of the federal Medicaid program, which is designed for low-income individuals, the blind and the disabled.

Medicare, administered by the federal government since 1965, guarantees access to health insurance for Americans ages 65 and older and younger people with disabilities.

According to Harris' office, the matter was initially looked into by the state Controller's Office. Then the attorney general's Bureau of Medi-Cal Fraud and Elder Abuse stepped in, commencing its own investigation along with the U.S. Attorney's Office in Los Angeles.

DHCS, which administers the Medi-Cal program, also assisted.

Harris noted that a small component of the settlement resolves certain federal Medicare allegations brought by James M. Swoben, a former SCAN employee, in a lawsuit filed in U.S. District Court for the Central District of California in July 2009.

Swoben's suit was filed pursuant to the federal and state False Claims Acts, which provide that any person with information about a false claim can file a sealed lawsuit on behalf of the government to recover the government's losses.

Under the settlement, the federal government will receive $3.82 million for the Medicare portion.

As for the Medi-Cal portion, $319.85 million will be split between the federal government and California, with the federal government receiving $129.38 million and the state $190.47 million.

"This settlement is a victory for the Medi-Cal beneficiaries we serve," DHCS Director Toby Douglas said in a statement Thursday.

"Using the scarce resources available in the most efficient way possible is a top priority for the state. We will continue our ongoing efforts to strengthen programs that protect the integrity of Medi-Cal."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

More News