A San Francisco telehealth company has agreed to pay more than $3.3 million to settle a billing fraud case that was unearthed by a whistleblower, the San Francisco District Attorney’s Office announced Monday.
Circle Medical Care of California, Circle Medical Technologies, Inc. and their medical director Dr. Nicole Tsang were accused of filing claims for reimbursement to federal healthcare providers and commercial insurance companies using National Provider Identifier numbers of physicians who did provide the services.
There was no evidence of Circle billing for services that were not provided, according to prosecutors.
Instead, the complaint — which was handled by District Attorney Brooke Jenkins’ office, the California Department of Insurance and the U.S. Department of Justice — alleges that the services were provided by nurse practitioners and physician assistants, for example, who had not yet been approved by the insurance companies that were billed.
The defendants have not admitted to any wrongdoing in the settlement.
“Medical providers have a legal duty to ensure that their practices comply with the law, particularly as it relates to the accuracy of claims submitted to insurance companies for reimbursement,” Jenkins said.
“Medical providers have a legal duty to ensure that their practices comply with the law, particularly as it relates to the accuracy of claims submitted to insurance companies for reimbursement.”
San Francisco District Attorney Brooke Jenkins
A whistleblower named Jason Vellen, a former employee, brought the case under a provision of the federal False Claims Act that allows people to take legal action on behalf of the United States and receive a portion of any settlement, according to federal prosecutors.
In this case, Vellen will receive $80,750 from the United States and $997,500 from California, while Jenkins’ office will get $926,250, which will be used to investigate and prosecute fraud cases.
Circle Medical operates an online telehealth platform through which it offers various medical services, including mental health, weight loss, primary care and sexual health services, according to its website.
Vellen was represented by the Pennsylvania-based law firm Kessler, Topaz, Meltzer, Check, LLP.
“This settlement affirms the important role of whistleblowers in combatting fraudulent medical billing, including in telehealth,” KTMC said in an emailed statement Monday. “We applaud the San Francisco District Attorney’s Office, California Department of Insurance, and the U.S. Department of Justice for their successful resolution of this matter.”
Lawyers for the company didn’t immediately respond to requests for comment.
