California-based healthcare company Seoul Medical Group Inc. and its subsidiary, Advanced Medical Management Inc., have agreed to pay over $62 million to settle allegations of Medicare fraud. The Trump administration’s Department of Justice secured the settlement following claims that the company submitted false diagnosis codes for spinal conditions to obtain higher payments from the Medicare Advantage program.
According to a Department of Justice (DOJ) press release, Seoul Medical Group will pay $58.74 million, while Dr. Min Young Cha, the company’s former president and majority owner, has agreed to pay $1.76 million. The DOJ stated that from 2015 to 2021, the company falsely diagnosed patients with severe spinal conditions, including spinal enthesopathy and sacroiliitis, despite many not suffering from these ailments.
The DOJ further alleged that when questioned about the false diagnoses, the company collaborated with Renaissance Imaging Medical Associates to fabricate radiology reports to justify the fraudulent claims. These reports enabled Seoul Medical Group to receive inflated Medicare reimbursements through the Centers for Medicare and Medicaid Services (CMS).
Acting Assistant Attorney General Yaakov M. Roth emphasized the significance of the case, stating, “Medicare Advantage is a vital program for our seniors, and the government expects healthcare providers to provide truthful and accurate information. Today’s result sends a clear message to the Medicare Advantage community that the United States will zealously pursue appropriate action against those who knowingly submit false claims for taxpayer funds.”
The lawsuit was filed under the False Claims Act’s whistleblower provisions by Paul Pew, a former Vice President and Chief Financial Officer of Advanced Medical Management. Under this provision, private individuals can sue on behalf of the government and receive a portion of the recovered damages.
