Last Updated on September 17, 2025 by The HD Post Staff
SAN BERNARDINO COUNTY — The U.S. Department of Justice announced September 17 that it filed a lawsuit under the False Claims Act against Inland Empire Health Plan (IEHP), alleging that it submitted false claims to California’s Medicaid program.
According to the government’s complaint, the Rancho Cucamonga-based health insurer contracted with California’s Department of Health Care Services (DHCS) to provide care to Riverside and San Bernardino County residents.
The coverage included Medi-Cal services, extending to those newly eligible under the “Medi-Cal Expansion.”
Since 2014, Medi-Cal has expanded to cover low-income adults without children, ages 19 to 64, earning up to 133% of the federal poverty level. The federal government paid all costs for the first three years.
Under its contract with DHCS, IEHP was funded to serve this population. If IEHP spent less than 85% on “allowed medical expenses,” it had to repay the difference to the state, which then returned the money to the federal government.
Complaint alleges IEHP gave providers “free money”
The complaint alleges IEHP misused surplus Medi-Cal funds through sham incentive programs and a retroactive rate increase.
IEHP allegedly diverted Medi-Cal funds to administrative costs, other patients, or gave it away without value in return. It further claims IEHP acted to conserve other funds and enrich itself.
Prosecutors say IEHP concealed the spending by making false statements to the state, knowing they’d be passed to the federal government.
For example, IEHP admitted internally it gave providers “free money” while telling DHCS the payments were performance incentives.
It also funneled consultant and tech costs through providers as incentives and backdated spending to earlier periods.
According to the complaint, these were not “allowed medical expenses” under IEHP’s contract with DHCS.
False Claims Act
“Today’s lawsuit against IEHP shows our steadfast commitment to hold accountable insurers that brazenly compromise the Medicaid system,” said Acting United States Attorney Bill Essayli.
The lawsuit highlights the government’s use of the False Claims Act, which makes it illegal to knowingly submit false or fraudulent claims for payment to the U.S. government.
Suspected fraud, waste, or abuse can be reported to the Department of Health and Human Services at 800-447-8477.
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