Seoul Medical Group Inc. and its subsidiary, Advanced Medical Management Inc., headquartered in California, have agreed to pay $58,740,000.
Their former president and majority owner, Dr. Min Young Cha, has agreed to pay $1,760,000 for allegedly violating the False Claims Act by causing the submission of false diagnosis codes for two spinal conditions to increase payments from the Medicare Advantage program.
Renaissance Imaging Medical Associates Inc., a California-based radiology group that worked with Seoul Medical, has also agreed to pay $2,350,000 for allegedly conspiring with Seoul Medical Group in connection with the false diagnoses for the two spinal conditions.
Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries can enrol in managed care insurance plans called Medicare Advantage Plans (MA Plans) and the MA Plans contract with healthcare providers, such as Seoul Medical Group, to provide the Medicare-covered benefits.
MA Plans are paid a per-person amount to provide the care to their enrollees and, in turn, the MA Plans pay the providers. The Centers for Medicare and Medicaid Services (CMS), which oversees the Medicare program, adjusts the payments to MA Plans based on demographic information and the health diagnoses of each plan beneficiary.
The adjustments are commonly referred to as “risk scores.” In general, a beneficiary with diagnoses that are more expensive to treat will have a higher risk score, and CMS will make a larger risk-adjusted payment to the MA Plan for that beneficiary.
Seoul Medical Group is a healthcare provider that started in 1993 in Los Angeles and has since expanded into at least six states. At times, it has employed 150 primary care providers and 1,000 specialists.
Min Young Cha started Seoul Medical Group and until 2023 was president and majority owner.
Allegedly, from 2015 to 2021, Seoul Medical Group and Cha submitted diagnoses for two severe spinal conditions, spinal enthesopathy and sacroiliitis, for patients who did not suffer from either of these conditions.
When an MA Plan questioned Seoul Medical Group about its use of spinal enthesopathy, Seoul Medical Group enlisted the assistance of Renaissance Imaging Medical Associates to create radiology reports that appeared to support the spinal enthesopathy diagnosis.
Both diagnoses increased payment from CMS to the MA Plan, which then passed along a portion of the increased payment to Seoul Medical Group.
