Facts

A qui tam lawsuit was filed against defendant Stars Adolescent Center Inc. and its affiliates for billing Medi-Cal from 1998 to 2003 for providing day treatment services to patients at one of its facilities (which is now closed) on days when the patients were absent or only present for part of the day. Plaintiff Krzesni who was the director of the program, recommended Stars conduct an audit and return overcharges, but claimed Stars failed to take these steps.

Stars asserted when Krzesni told Stars of the billing errors, they took immediate steps to do an audit and offered to pay back the overpayment which resulted from an employee's lack of diligence in reviewing attendance records and applying new state regulations related to reimbursement for day treatment services. For the entire period, the billing errors amounted to approximately $279,000 or less than 5 percent of the program revenues.

The state of California and the federal government joined the suit in order to settle the claims.

Result

Settlement whereby Stars Behavioral Health Group Inc. will pay $1 million ($400,000 will go to the federal government, $400,000 to the state of California and $200,000 to the relator, Mr. Krzesni). Stars also signed a Corporate Integrity Agreement with the U.S. Department of Health and Human Services' Office of the Inspector General.