Seoul Medical Group Inc., based in Koreatown, Los Angeles, and its subsidiary Advanced Medical Management Inc. have agreed to pay $58.74 million following allegations of submitting false diagnosis codes for spinal conditions to increase Medicare Advantage payments. Dr. Min Young Cha, the former president and majority owner, will pay an additional $1.76 million.
Renaissance Imaging Medical Associates Inc., a radiology group from Northridge, is also implicated and has agreed to pay $2.35 million for allegedly conspiring with Seoul Medical Group regarding the false diagnoses.
“The false claims to Medicare resulted in millions of dollars in losses to the government,” stated Acting U.S. Attorney Joseph McNally. “Through this $62.85 million settlement we have recouped those losses and the healthcare providers who made the false claims are paying millions of dollars in additional damages.”
Acting Assistant Attorney General Yaakov M. Roth commented on the importance of accuracy within Medicare Advantage: “Medicare Advantage is a vital program for our seniors and the government expects healthcare providers who participate in the program to provide truthful and accurate information.” He added that today's outcome sends a clear message about pursuing action against fraudulent claims.
The Centers for Medicare and Medicaid Services (CMS) adjusts payments based on beneficiaries' health diagnoses, known as "risk scores." Allegations suggest that between 2015 and 2021, Seoul Medical Group submitted false diagnoses for spinal enthesopathy and sacroiliitis, leading to increased CMS payments which were partially passed on by MA Plans to Seoul Medical Group.
Deputy Inspector General Christian J. Schrank highlighted concerns over such practices: “Providers who game the Medicare program to increase profit undermine the foundation of care and diminish patient trust in the nation’s public health care system.”
This civil settlement resolves claims under qui tam provisions of the False Claims Act brought by Paul Pew, former Vice President and CFO of Advanced Medical Management. The case is filed as United States of America ex rel. Pew v. Seoul Medical Group, Inc., et al., No. 2:20-cv-05156 (C.D. Cal.). The relator's share remains undetermined.
The resolution was achieved through collaboration among various governmental bodies including the Justice Department’s Civil Division and Fraud Section along with assistance from HHS-OIG.
Assistant United States Attorney Karen Y. Paik along with Trial Attorneys J. Jennifer Koh and Robbin O. Lee led investigations into this matter.
It should be noted that these resolved claims are allegations only without any determination of liability.