This case underscores ongoing federal efforts to scrutinize Medi-Cal providers, protect public funds, and ensure taxpayer dollars are used appropriately for patient care, reflecting broader enforcement actions to uphold the integrity of Medicaid and public health programs.

The lawsuit describes schemes such as sham incentive programs and retroactive rate increases used to divert funds from their intended medical purpose.

The Medi-Cal expansion targeted adults aged 19 to 64 with incomes up to 133% of the federal poverty level, with funds supposed to be spent on medical expenses, and penalties imposed if less than 85% was used for such expenses.

Prosecutors allege these practices involved submitting false statements and failing to return overpayments, causing significant financial harm to taxpayers and undermining the integrity of California’s Medicaid system.

The allegations are currently unproven, and IEHP has not publicly responded to the lawsuit, which claims the health plan failed to return surplus funds and used hundreds of millions for unauthorized expenses to enrich itself.

The U.S. Department of Justice has filed a federal lawsuit against Inland Empire Health Plan (IEHP), one of California's largest Medi-Cal providers, accusing it of Medicaid fraud and violations of the False Claims Act related to the misuse of nearly $3.5 billion in federal funds received under the Affordable Care Act.

Acting U.S. Attorney Bill Essayli emphasized the commitment to holding insurers accountable to maintain integrity and prioritize patient care over financial gain.

This case highlights ongoing federal efforts to combat healthcare fraud within the Medicaid system, encouraging public reporting of potential fraud, waste, or abuse.

IEHP responded by stating it disagrees with the DOJ and is prepared to defend itself through legal channels.

The lawsuit alleges IEHP knowingly retained overpayments, created sham incentive programs, and disguised improper payments tied to Medi-Cal, affecting services in Riverside and San Bernardino counties.

IEHP, serving 1.5 million residents in Southern California, is accused of making false statements to Medi-Cal and retaining overpayments between 2014 and 2016.

The Department of Health and Human Services encourages individuals with information about healthcare fraud to report it directly to the Office of Inspector General.