A company accused of distributing false results for hundreds of coronavirus tests will pay more than $20 million in a settlement announced by Los Angeles City Atty. Mike Feuer.
Feuer and Dist. Atti. George Gascón has accused Sameday Technologies and its chief executive, Felix Huettenbach, of sending false results to hundreds of people, telling them they had tested negative for coronavirus when the labs hadn’t actually performed their tests. tests. Some tests were never processed at all, according to the complaint filed in court on Wednesday.
More than 500 test results are “confirmed or suspected to be false, tampered with, or tampered with,” the lawyers wrote. In their complaints, they alleged that Sameday would forge a negative result – under the direction of its CEO – when someone who did not get their result in time complained or threatened to report the company.
Sameday said in a statement that it was founded in September 2020 “to make fast and reliable COVID testing available to everyone.”
“At first, amid the chaos of massive increases in service demand and supply shortages, we failed to achieve the standards of excellence that our customers deserve,” the company said. “We fixed the issues that arose in 2020 and made significant investments in compliance and systems to ensure we meet our customers’ expectations.”
In the proposed settlement agreement in court, the company agreed to pay $22.5 million, including more than $9.6 million in restitution and nearly $13 million to the city and county to enforce consumer protection laws.
Under the settlement, Sameday is also required to comply with a court injunction restraining it from making false statements and engaging in other illegal business practices. A spokesperson for Feuer said the settlement agreement must be approved by the judge.
Dr. Jeff Toll, a doctor accused of teaming up with the company to get reimbursed by health insurers for medically unnecessary consultations, has also agreed to pay nearly $4 million to resolve allegations of drug fraud. insurance, the city attorney’s office said.
D. Shawn Burkley, an attorney representing Toll, denied any wrongdoing: “We’ve settled the case, but we don’t believe Dr. Toll did anything unethical.”
Feuer and Gascon alleged that Sameday promised it could get results in 24 hours for a $195 fee, but “the promise was false – Sameday couldn’t guarantee a 24-hour turnaround” because its Contracts with outside labs “specifically stated that they might not deliver results as quickly.
Unable to deliver results as quickly as promised, the company quickly began faking coronavirus test results by taking reports from former consumers who had tested negative and then altering name, dates and other information. identification to match the new person, LA attorneys alleged.
They also alleged that Sameday engaged in health insurance fraud, working with Toll to charge insurance companies extra fees for “medical consultations”.
Sameday referred people to the doctor for “medically unnecessary” consultations which he submitted for reimbursement from health insurers, and the company got the bulk of its profits for the consultations, according to their complaint.
To rack up more insurance claims, Sameday also set up a virtual call center for doctors who were supposed to do around 100 consultations a day – each of them lasting three minutes – which took place after people had already taken their coronavirus tests and, in many cases. , tested negative, according to the complaint.
Lawyers alleged that more than 80,000 claims had been submitted to health insurers for medically unnecessary consultations and that the company had collected millions of dollars from California-based insurance claims.
“It is beyond outrageous that anyone is tampering with COVID tests, as we claim, which happened here. If you test negative, you assume it is safe to go to work, visit family and friends, or take a vacation. But victims of this alleged scheme may have unknowingly spread COVID to others or may not have received timely and appropriate care themselves,” Feuer said in a statement.
Sameday Technologies, doing business as Sameday Health, is based in Los Angeles and offers coronavirus testing nationwide, promoting itself on its website as “the most trusted COVID-19 testing solution for teams and companies”.
In a company-sponsored TV segment, Huettenbach said the downside of PCR testing is that “it usually takes a bit longer because you have to transport the samples to a lab to have them processed. But we’ve worked out the logistics so that at most of our locations it’s less than 24 hours.
Sameday Health has faced concerns over its business practices before: In December, New York Atty. General Letitia James sent a warning letter to the company for “misleading advertising” over the speed of its test results, saying consumers were waiting longer than Sameday had promised after paying for expedited tests.
Earlier this year, his office announced that Sameday was reimbursing more than $230,000 to thousands of customers who were billed for accelerated results.
The company was also sued for its employment practices.
One of those lawsuits, brought under a California law that allows injured employees to seek civil penalties for themselves, other workers and the state, alleges the company wrongly filed workers as independent contractors and paid them “on the basis of an unrealistic assumption of a 40-hour work week; in reality, to do the job properly, they were required to work 40 to 60 hours a week without payment of the salary required”, including overtime.
This case is still pending.
In another lawsuit against Sameday alleging wage violations, the company recently said in court filings that it does not oppose a motion to tentatively approve a class action settlement — which would include a payout of $300,000 by the company and other defendants – but did not accept the premise that the class members were “employees”.
Sameday said Wednesday he had no further comment on the matter.