The owners of three medical companies agreed to a $10 million settlement in January to resolve allegations of a kickback scheme that caused false claims to Medicaid and Medi-Cal. California receives $4 million from the settlement.
Earlier this year, a pharmaceutical manufacturer and its chief executive officer agreed to a $47 million settlement related to similar allegations. California will receive nearly $385,000.
We often discuss the importance of whistleblowers in uncovering billions of dollars in fraud against the federal government, particularly within health care programs, but the stakes are high in California and other states as well.
Pursuing this fraud matters because the consequences affect everyone. Fraud contributes to higher health insurance premiums, increased taxes to fund public programs, and public health risks when providers cut corners. Given the size of government health care budgets, enforcement agencies rely on whistleblowers who identify misconduct and report it.
The False Claims Act, a Civil War era statute, allows the federal government to seek triple damages and penalties from individuals or entities that knowingly submit false claims for government reimbursement. Many states, including California, have their own False Claims Act laws. California’s law includes a qui tam provision that allows whistleblowers to file lawsuits on behalf of the government, protects them from retaliation, and may entitle them to a portion of any recovery.
Fraud in the billions
For fiscal year 2024, the federal government reported $2.9 billion in False Claims Act settlements and judgments. Nearly 60 percent, or $1.67 billion, resulted from health care fraud. These figures reflect only fraud that was uncovered and resolved. Such schemes often involve Medicare, Medicaid, and TRICARE.
In California’s Medicaid program, Medi-Cal, fraud may total billions of dollars each year, according to the California Attorney General’s Office. This estimate is based on government and private studies and on the hundreds of millions of dollars recovered annually by the Division of Medi-Cal Fraud and Elder Abuse.
Medi-Cal expenditures exceed $40 billion per year, representing nearly one quarter of California’s total budget, and the program provides health coverage for approximately one in six Californians.
According to an analysis of publicly reported information by The Anti-Fraud Coalition, the Central District of California recorded $297.02 million in settlement recoveries from July 2024 through July 2025. California also led recoveries by state attorneys general, totaling $134.25 million. As at the federal level, most recoveries involved health care fraud.
What does fraud look like?
Medi-Cal fraud commonly involves billing for services, drugs, or supplies that were unnecessary, not provided, or less expensive than billed. Fraud may also include kickbacks for Medi-Cal referrals, identity theft to obtain payments, or allowing unauthorized entities to use a provider’s billing privileges.
If you have observed conduct like this, consult an experienced whistleblower attorney who can advise you on your situation and the appropriate next steps while protecting your interests. Keller Grover offers free and confidential consultations. With more than 30 years of combined experience litigating antitrust, fraud, and employment cases, we have helped recover billions of dollars for clients.