A former Van Nuys doctor, his wife, a medical center and a laboratory have agreed to pay $15 million to settle allegations of filing false Medicare and Medi-Cal claims allegedly linked to kickbacks and illegal patient referrals.
The settlement was detailed in news releases from both the U.S. Department of Justice and the California Attorney General’s Office. The allegations against former physician Mohammad Rasekhi; his wife, Sheila Busheri; Southern California Medical Center; and Universal Diagnostic Laboratories (UDL) were originally part of a private lawsuit brought under the “whistleblower” guidelines of the federal False Claims Act.
Under that law, private parties called “relators” can file a fraud action on behalf of the U.S. government and receive a portion of funds that are recovered, according to the Justice Department. The settlement earmarks $10 million to cover the proportion of the case involving the government, with $5 million to be paid out to relators.
Because the state of California paid out medical claims targeted by the lawsuit, it will receive about $7 million from the settlement, according to the U.S. Attorney’s Office in the Central District of California.
Dr. Rasekhi and his wife allegedly violated the Stark Law when they self-reserved patients to their own laboratories and then billed government health care programs for tests, according to the California Attorney General’s Office. They also paid kickbacks to obtain referrals in violation of the federal Anti-Kickback Statute, the office said.
The attorney for Southern California Medical Center (SCMC) stressed that the center did not admit to any of the charges and said none of the allegations was proved by the plaintiffs.
“Resolution of this case was necessary for the continued existence of SCMC so that it can provide much-needed medical care to the underserved population in Los Angeles County,” Jennifer Scott told the Southern California Record in an email. “Rather than engage in a multiyear and extremely costly litigation, SCMC made the difficult decision to not fight to clear its name, but rather acted in the best interest of its patients to settle this case and focus on providing vital care to the underserved.”
The settlement resolves all the claims, according to Scott, and allows SCMC to continue to serve patients at its six Southern California clinics.
The plaintiffs in the original litigation were former employees or managers of both SCMC and UDL, according to prosecutors, who acknowledged that no determination of defendant liability has been made.
“Kickback and self-referral schemes risk impairing the judgment of health care providers and diminish the reliability of the care that they render,” Principal Deputy Assistant Attorney General Brian M. Boynton, who heads the Justice Department’s Civil Division, said in a prepared statement. “This resolution upholds the department’s abiding view that Medicare and Medicaid beneficiaries deserve care that is free from the taint of referrals that were driven by the providers’ financial interest.”
California Attorney General Rob Bonta stressed that when government health care plans are exploited, the interests of patients in need are undermined.
“The alleged actions of Dr. Rasekhi not only broke the trust of his patients but also diverted essential resources away from vital health care services that benefit the community,” Bonta said in a prepared statement. “My office is dedicated to ensuring that integrity and compassion guide the care provided through the Medi-Cal program.”