California health system pays $31.5M to settle drug overbilling case

Fountain Valley, Calif.-based Memorial Health Services has agreed to pay $31.5 million for overcharging California’s Medicaid program for prescription drugs, California Attorney General Xavier Becerra announced Nov. 2. 

From December 2016 to May 2019, Memorial Health Services submitted claims to Medi-Cal for outpatient prescription drug reimbursements that were higher than the actual cost the system paid for the drugs. The health system disclosed the overcharges to the Office of the Inspector General in October 2019. 

“Today’s settlement was the result of Memorial Health coming forward, doing the right thing, and alerting the authorities of this error,” Mr. Becerra said in a news release. “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.” 

About $12.6 million of the settlement will go to the federal government and about $18.9 will go to California. 

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