El Dorado County Health Care Provider Agrees to Pay $5.5m to Resolve False Claims Act Allegations

SACRAMENTO, Calif. — Acting U.S. Attorney Phillip A. Talbert announced today that El Dorado County based Marshall Medical Center (MMC) will pay the United States and the State of California $5.5 million to settle allegations that MMC; Marshall Foundation for Community Health; El Dorado Hematology & Medical Oncology II, Inc.; Lin H. Soe, M.D.; and Tsuong Tsai, M.D., violated the federal False Claims Act and the State of California’s version of the False Claims Act. The federal lawsuit, filed by whistleblower Colleen Herren, contends that MMC and the other defendants defrauded Medicare, Tricare and Medicaid by a variety of billing improprieties. 

The settlement resolves the allegations that the defendants submitted false Medicare and Medi-Cal bills. The complaint alleged that the defendants performed chemotherapy infusions without having a physician present as required. One of the oncologists referred cancer patients from the oncology clinic to the hospital for blood transfusions and improperly billed Medicare for observation codes that require visits by the doctor in conjunction with the transfusions and no doctor visited. The clinic’s oncology nurses used single dose vials on two subsequent patients and billed Medicare and Medicaid for two dosages. In the settlement, the defendants do not admit liability for the alleged false conduct. 

Ms. Herren filed her lawsuit on behalf of the United States and State of California in January 2012, and she alleged that she was fired from her job as an oncology nurse in the clinic when she apprised management of the defendants’ billing practices. Ms. Herren's employment claims were not included in the settlement and have since been separately resolved and dismissed. She will receive a 26 percent share of the $5.5 million per the whistleblower provisions of the False Claims Act.

“Health care related fraud investigations are one of my District’s top priorities. My office works closely with our federal and state partners to ensure that patients receive proper medical care with drug regimens that are safe and properly administered, and to ensure that our publicly funded health care insurers reimburse practitioners only for approved services and medicines,” stated Acting U.S. Attorney Talbert.

This case was investigated by the United States Office of Inspector General of the U.S. Department of Health and Human Services, the Defense Criminal Investigative Service Office of Inspector General, and the California Department of Justice, Office of the Attorney General, Bureau of Medi-Cal Fraud and Elder Abuse. Assistant U.S. Attorneys Kelli L. Taylor and Kurt A. Didier handled the case.