$3M Settlement in California Respiratory Fraud Case

OAKLAND (August 26, 2021)—California Attorney General Rob Bonta announced a $3.31 million settlement against home respiratory services company, SuperCare Health Inc. (SuperCare) for defrauding the state and federal government by knowingly billing Medicare and Medi-Cal for servicing ventilators that were no longer medically necessary. The proposed settlement resolves allegations that the Downey, California,-based company submitted fraudulent claims to Medi-Cal in violation of the state and federal False Claims Acts. Under the proposed settlement, SuperCare will pay a total of $3.31 million to multiple government plaintiffs, with California receiving approximately $327,000.  

“Medi-Cal is a lifeline that provides access to free or affordable health care services for millions of Californians and their families,” said Attorney General Bonta. “When any health care service provider defrauds the program, they break the public’s trust and put profits before the patients who count on them for honest, quality care and services. It is my hope that today’s settlement is a reminder that we will investigate and prosecute allegations of Medi-Cal fraud.”

SuperCare sells and rents equipment used in the treatment of breathing-related disorders, such as sleep apnea and chronic obstructive pulmonary disease. One of the machines used to assist patients with breathing is the noninvasive ventilator. The ventilators, either with or without oxygen, deliver pressurized air to patients to assist in the breathing process, particularly during sleep.

A whistleblower alleged that SuperCare, which services patients in Southern California and Nevada, continued to service noninvasive ventilators that were no longer being used by patients, and were not medically necessary, and therefore no longer eligible for Medi-Cal reimbursement. Despite this knowledge, the company billed Medicare and Medi-Cal for servicing the ventilators. The whistleblower filed his case in the United States District Court for the Central District of California.

A subsequent three-year investigation by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA), working with the United States Attorney’s Office for the Central District of California and the Nevada Medicaid Fraud Control Unit, found that claims submitted by SuperCare from May 2013 through October 2019 validated the whistleblower’s claims. 

Through the DMFEA, the California Department of Justice works to protect Californians by investigating and prosecuting those who perpetrate fraud on the Medi-Cal program. DMFEA also investigates and prosecutes those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state. The division regularly works with whistleblowers and law enforcement agencies to investigate and prosecute crimes. 

The DMFEA receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award totaling $41,264,032 for federal fiscal year 2020-2021. The remaining 25%, totaling $13,754,675 for fiscal year 2020-2021, is funded by the State of California. The federal fiscal year is defined as October 1, 2020, through September 30, 2021.

A copy of the settlement is available here.