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Michelman & Robinson Obtains Settlement for Emergency Room Physicians in Controversial Kern Health Systems Lawsuit

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July 26, 2010

Michelman & Robinson, LLP’s (“M&R”) Health Care Department secured a significant settlement for Emergency Medical Services Group (“EMSG”) in a lawsuit that sought damages against medi-cal agency, Kern Health Systems (“KHS”) for improperly reimbursing EMSG’s emergency room physicians.

As one of California’s leading firms in health care law, EMSG retained M&R to represent the medical group in its reimbursement lawsuit against KHS for medical services rendered and the counter suit which alleged that the doctors fraudulently overbilled the Medi-Cal administrator.

The lawsuit drew intense media scrutiny and enveloped Kern Health in a nearly debilitating scandal after the public learned that the agency had spent nearly $8 million in tax-payer’s money to fund an investigative audit by Allied Management Group (“Allied”) of EMSG’s claims. While Kern Health continued to pay Allied nearly $130,000 a month throughout the duration of the suit for fraud and abuse detection services, several of its top executives and board members admitted that they had not been fully aware of the extensive payments that the company had made to Allied in 2008 and 2009.

Led by partner Andrew H. Selesnick, M&R successfully negotiated the terms of the settlement, which included an estimated $1 million payment, a $575,000 lump-sum, as well as a past payment of $195,000 from 2008. In addition to the cash payments, M&R obtained a compelling provision in the settlement that will adjust future payments to the doctors.

“We are very pleased with the outcome of this suit. Our Health Care team worked diligently to create and execute a strategy that would secure the best results for our client,” said Dana A. Kravetz, Firm Managing Partner.

Andrew H. Selesnick commented, “This was an especially gratifying outcome because it exposed Kern Health’s pattern of illegal and unethical behavior. Now real reform can take place.”