California Health Group To Pay $31.5M Over Drug Billing

A non-profit California health care chain will pay more than $31.5 million to settle allegations that it overbilled Medi-Cal for drugs bought through a federal program, authorities said Monday.

Memorial Health Services, based in Fountain Valley southeast of Los Angeles, didn’t acknowledge any wrongdoing in agreeing to the payment, according to statements from the state attorney general’s office and the U.S. attorney’s office.

Memorial Health, also known as MemorialCare, operates hospitals, clinics and a health plan in Los Angeles and Orange counties.

Last year, Memorial Health disclosed that its audit had determined that from 2016 to 2019, its hospitals and pharmacies overbilled California and the federal government $21 million for medication supplied under the federal 340B drug pricing program that helps lower-income people with their medical costs, authorities said.

Program particiapnts bill Medicaid, which is known as Medi-Cal in California.

Memorial Health improperly submitted reimbursement claims for outpatient drug prescriptions at its usual and customary rate, which was higher than what the group actually paid for the drugs, authorities said.

“Today’s settlement was the result of Memorial Health coming forward, doing the right thing, and alerting the authorities of their error,” Attorney General Becerra said in a statement. “The money from the settlement will go back where it belongs: to California’s residents, particularly low-income families and children who rely on Medi-Cal for their healthcare coverage.”


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