SAN FRANCISCO—On Monday, July 6, the San Francisco District Attorney’s Office announced that the California Department of Insurance (DOI) and the United States Attorney for the Northern District of California, entered into a $3,325,000 civil settlement in a medical billing fraud case brought against Circle Medical Care of California, Circle Medical Technologies, Inc., and their Chief Medical Officer and medical director Dr. Nicole Tsang, D.O. (collectively, “Circle Medical”).
Circle Medical is a San Francisco-based company that operates an on-line telehealth platform through which it offers medical services, including mental health treatment. The complaint alleges that Circle Medical, for years submitted claims for reimbursement to both federal payers and commercial insurance providers using the NPI (National Provider Identifier) number of physicians who did not actually provide the treatment services.
The complaint further alleges that, in many instances, the services were provided by contracted professionals, including nurse practitioners and physician assistants, who had not yet been credentialed (approved) by the insurance companies which were billed.
The action was initially filed as a whistleblower lawsuit by a former employee of Circle Medical. The SFDA’s Office and DOI intervened on behalf of the State of California under the California Insurance Frauds Prevention Act (Insurance Code section 1871.7.) While there was no evidence of Circle billing for services that were not provided, the use of improper NPI numbers was unlawful as alleged in the complaint, and, in many some incidents, resulted in higher billing rates.
Under the terms of the settlement agreement, and without admitting liability, Circle agreed to pay $475,000 to the United States and $2,850,000 to California. The whistleblower will receive $80,750 from the United States and $997,500 from California. The San Francisco District Attorney’s Office received a total payment of $926,250, which will be used to investigate and prosecute fraud cases. Following settlement, the Court entered a stipulation of dismissal of the underlying claims.
The case is captioned United States and State of California ex rel. Jason Vellen v. Circle Medical Care of California, Circle Medical Technologies, Inc., Dr. Nicole Tsang, D.O, and George Favvas, No. 3:24-cv-02024-TSH (N.D. Cal.).
This case was investigated and settled by the Consumer and Environmental Protection Unit of the San Francisco District Attorney’s Office. To report fraud members of the public may call the White Collar Crime Tip Line at 1-628-652-4444. Tipsters may remain anonymous.
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