California insurer to pay $320 million to settle overpayment allegations

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Frontline, ProPublica slam assisted living sector in documentary airing tonight
Frontline, ProPublica slam assisted living sector in documentary airing tonight

A California health maintenance organization will pay a record $320 million to settle charges that it was overpaid by the state's Medicaid program over several years.

SCAN Health Plan will pay Medi-Cal $190.5 million and the federal government $129.4 million as part of a settlement agreement. In addition to being improperly paid, the company did not disclose the proper financial documents to state investigators, according to the Los Angeles Times. SCAN also is paying $3.8 million to settle whistle-blower claims that it was overpaid by Medicare.

Federal investigators said some of the overpayments involved home health patients who were coded as if they were skilled nursing facility residents. Reimbursement for nursing home care is higher than that of home health. Other times, Medi-Cal reimbursed SCAN for SNF residents “even though the company wasn't obligated to continue providing services to them,” the newspaper reported.

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