OAKLAND — California Attorney General Rob Bonta today announced a nearly $2.1 million settlement with Pomona Valley Hospital Medical Center after the hospital self-reported that it overbilled Medi-Cal for prescription medication purchased and reimbursed under a federal drug pricing program. The hospital allegedly overbilled the United States and California, which jointly fund Medi-Cal, a government-funded program that provides health coverage for low-income individuals in California.

“The Medi-Cal system is a lifeline that provides access to free or affordable healthcare services for millions of Californians,” said Attorney General Bonta. “When providers like Pomona Valley overcharge Medi-Cal, they jeopardize its ability to prevent harm to our most vulnerable patients. Today’s settlement builds on our continued commitment to recover losses suffered by the Medi-Cal system when providers overcharge it.”

From December 2016 through September 2021, the hospital improperly charged higher “usual and customary” costs, rather than lower “actual acquisition costs,” as required under the 340B Drug Pricing Program, which requires drug manufacturers to provide outpatient medication to eligible health care organizations at significantly reduced prices. These alleged cost pricing practices ultimately led the hospital to overbill the United States and California approximately $1.4 million. Under the settlement, Pomona Valley has agreed to pay the United States $873,730 and California $1,225,954 to resolve the allegations. 

The settled claims are allegations only, and Pomona Valley has not admitted any wrongdoing beyond its self-disclosure to the United States and California.

DMFEA protects Californians by investigating and prosecuting those who defraud the Medi-Cal program as well as those who commit elder abuse. These settlements are made possible only through the coordination and collaboration of governmental agencies, as well as the critical help from whistleblowers who report incidences of abuse or Medi-Cal fraud at oag.ca.gov/dmfea/reporting. 

DMFEA receives 75% of its funding from HHS-OIG under a grant award totaling $87,038,485 for federal fiscal year 2024. The remaining 25% is funded by the State of California. The federal fiscal year is defined as October 1, 2023 through September 30, 2024.

A copy of the settlement agreement is available here.