California Attorney General Rob Bonta has announced a $47 million settlement with pharmaceutical company QOL Medical and its CEO, Frederick E. Cooper. The settlement addresses allegations of false claims submitted to Medicaid and other government healthcare programs through a kickback scheme conducted between 2018 and 2022.
The accusations involved QOL providing free Carbon-13 test kits to healthcare providers. These kits were used to identify potential patients for Sucraid, a drug treating congenital sucrase-isomaltase deficiency (CSID), despite some cases where the medication was not medically necessary. This practice allegedly led to fraudulent claims being submitted to Medicare and Medicaid, including California's Medi-Cal program.
Attorney General Bonta emphasized the importance of patient-focused decision-making in healthcare, stating, “Decisions impacting patients' health must be guided exclusively by what is best for the patient.” He further noted that kickback schemes prioritizing profit over patient care are both immoral and illegal.
QOL admitted to distributing over 75,000 C13 test kits starting in 2018. The company paid a clinical laboratory for analyzing these tests and used the results to target potential Sucraid users through their sales force. This conduct was deemed a violation of multiple statutes, including the Anti-Kickback Statute and federal False Claims Act.
The California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA) played a key role in this investigation. The DMFEA is funded primarily by the U.S. Department of Health and Human Services, with additional support from the State of California.
Bonta expressed gratitude for the collaboration among local, state, and federal partners in addressing this issue: “My office is dedicated to holding accountable those who would defraud California’s critically important Medi-Cal program.”
The resolution also highlights the significance of whistleblowers in identifying instances of abuse or fraud within Medi-Cal programs.
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