DOJ sues Inland Empire Health Plan over alleged false Medi-Cal claims

The U.S. Department of Justice has filed a lawsuit against Inland Empire Health Plan (IEHP), accusing the Rancho Cucamonga-based insurer of violating the False Claims Act by making false statements and improperly retaining overpayments tied to California’s Medicaid program.

Why it matters: The complaint, filed Wednesday in federal court, alleges IEHP devised schemes to misuse millions in surplus Medi-Cal Expansion funding through sham incentive programs and a retroactive rate increase that funneled money into impermissible expenses. Prosecutors said the plan spent taxpayer dollars on administrative costs, unrelated patient groups and payments that delivered “no value in return.”

“Today’s lawsuit against IEHP shows our steadfast commitment to hold accountable insurers that brazenly compromise the Medicaid system,” Acting U.S. Attorney Bill Essayli said in a statement. “We will take every measure to restore integrity and accountability to the Medicaid system and ensure that patient care – not financial gain – is the primary focus of our health care system.”

Local impact: IEHP is a major Medi-Cal managed-care plan for Riverside and San Bernardino counties, alongside Molina Healthcare. Together they cover a large portion of the region’s low-income residents, including many Redlands families. IEHP reports it supports about 1.5 million residents across the two counties through Medi-Cal and IEHP DualChoice (for people with both Medi-Cal and Medicare).

Countywide, Medi-Cal enrollment in San Bernardino County was about 857,000 in 2024, down 2% year-over-year but up 19% since 2015, underscoring the program’s role in local coverage trends. San Bernardino County enrollees typically select IEHP or Molina as their managed-care plan; county materials and recent agreements reflect both plans’ participation.

IEHP responds: In a statement released Wednesday, IEHP said it “strongly disagrees with the DOJ allegations and is prepared to defend our efforts through the appropriate legal process.”

“For nearly 30 years, IEHP has created access to care for underserved populations in Riverside and San Bernardino counties,” the statement read. “We remain committed in our mission to heal and inspire the human spirit for our 1.5 million members.”

What’s next: Deputy Assistant Attorney General Brenna Jenny said the case reflects the Justice Department’s focus on protecting the integrity of Medicaid. “Today’s complaint demonstrates our continued commitment to protect the integrity of the Medicaid program, and the taxpayer dollars that support it, from health insurers that knowingly seek to divert program funds for their own financial benefit,” she said.

The case is being handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Central District of California, the California Department of Justice, and federal and state health agencies.

The claims are allegations only; no determination of liability has been made.

Members of the public can report suspected health care fraud to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).