US Government Alleges Overpayments by Inland Empire Health Program
The U.S. government has reportedly made misleading statements and filed claims involving alleged overpayments against the Inland Empire Health Program, commonly referred to as IEHP.
This action falls under the False Claims Act, as detailed in a recent announcement from the U.S. Department of Justice. Essentially, the complaint suggests that IEHP has not been forthcoming about its operations with Medi-Cal, California’s Medicaid program, which partners with the Department of Healthcare Services in the state.
IEHP, based in Rancho Cucamonga, serves over 1.5 million members, making it the largest nonprofit Medicare Medicaid public health plan in the U.S., according to their own information.
U.S. lawyer Bill Essayli stated, “Today’s lawsuit against IEHP shows our steadfast commitment to ensuring that insurance companies, particularly those involved in Medicaid, are held accountable. We will strive to restore integrity and focus on patient care rather than financial gain.”
The release from the DOJ mentions that since January 2014, Medi-Cal has been expanded to cover previously uninsured residents in what’s known as “Medi-Cal expansion.” Adults between 19-64 who make up to 133% of the federal poverty level are included in this group. Initially, the federal government fully funded this expansion for the first three years.
“As part of its agreement with the Department of Healthcare, IEHP has been allocated funds to aid the Medi-Cal expansion group,” the release explained. “Should IEHP fail to spend at least 85% of these funds on allowable healthcare expenses, they must reimburse the state for any shortfall.”
The complaint alleges that IEHP has concocted a plan to misuse surplus funds via bogus incentive programs and inflated retroactive contractual rates. Prosecutors claim that IEHP diverted funds for inappropriate uses, such as administrative expenses and spending on different patient groups, and even traded federal funds for non-returnable ones. The assertion is that IEHP is driven by a desire to accumulate excess funds.
Additionally, the complaint suggests IEHP officials misled the state by making false statements to legitimize their spending, consciously aware that this information would be communicated to the federal government about the purposes and timing of payments to service providers.
For instance, the DOJ release notes that internally, IEHP has acknowledged distributing “free money” to providers, yet communicated to the Department of Healthcare Services that such payments were linked to a metric-based incentive program designed to reward good performance.
The claim also contends that payments for consulting and technology services were presented as incentive payments, designed to recoup spending from providers that should have been from prior periods. According to the complaint, these payments should not have been allocated for medical expenses under the terms established with the Department of Healthcare.
In response to the allegations, an IEHP representative provided a statement to CBS News Los Angeles, asserting, “The Inland Empire Health Plan is aware of the submission by the U.S. Department of Justice regarding violations of the False Claims Act. IEHP strongly contests these allegations and is prepared to defend our position through legal channels.”
