April 11, 2025
Seoul Medical Group Inc. and Advanced Medical Management Inc., have agreed to settle alleged violations of the False Claims Act for $62 million. The settlement includes a payment by the entities’ former president and majority owner, Dr. Min Young Cha. An unaffiliated entity, Renaissance Imaging Medical Associates Inc., will pay $2.35 million for its participation in the alleged scheme.
Private insurance companies (MAOs) offer Medicare Advantage (MA), or Part C, plans, as an alternative to traditional Medicare. The Centers for Medicare & Medicaid Services (CMS) contracts with MAOs to provide Medicare benefits to individuals who original Medicare would otherwise cover. CMS pays MA Plans a fixed, or capitated, amount for each enrolled beneficiary. To ensure the payments accurately reflect the expected cost of providing health care to each beneficiary, CMS uses a process called “risk adjustment” to adjust payments based on the health condition of its enrollees. In plain terms, the sicker the MA Plan’s enrollees, the higher the capitated payments the MA Plans receive.
Seoul Medical Group (SMG) is a large network of primary care providers and specialists across multiple states. SMG contracts with Medicare Advantage plans to provide Medicare-covered care to beneficiaries.
Advanced Medical Management Inc. (AMM) is a Management Services Organization (MSO) and a wholly-owned subsidiary of Seoul Medical Group. AMM provides administrative and operational support services to physicians and healthcare organizations.
Renaissance Imaging Medical Associates (RIMA) is a California-based radiology practice.
In 2020, a former Advanced Medical Management executive filed a whistleblower complaint under the qui tam provisions of the False Claims Act. Under these provisions, private parties can file actions on behalf of the United States and receive a portion of any recovery.
The whistleblower alleged that SMG made patients appear sicker than they actually were to increase the capitated payments. Specifically, between 2015 and 2021, SMG submitted false diagnoses for two spinal conditions: spinal enthesopathy and sacroiliitis. In furtherance of the fraud, SMG allegedly conspired with RIMA to create fictitious radiology reports supporting the false diagnoses. This deception caused increased payments from CMS to the MA plan. The MA plan then passed a portion of these payments back to defendants.
Seoul Medical Group Inc. and Advanced Medical Management Inc. have agreed to pay $58.7 million. Dr. Min Young Cha has agreed to pay $1.76 million. Additionally, Renaissance Imaging Medical Associates Inc. will pay $2.35 million.