Sameday Technologies, which operates under Sameday Health, has a total of 55 testing sites throughout the country, with 16 locations in Los Angeles County, including five in the city.
Los Angeles City Attorney Mike Feuer and Los Angeles County District Attorney George Gascón filed the complaint, alleging that Sameday Health and its CEO Felix Huettenback falsely advertised that test results would be provided to customers within 24 hours, knowing that it couldn't make that guarantee. The city also alleged that they falsified and forged COVID-19 test results to at least 500 customers when it couldn't provide real results within 24 hours.
The complaint said that the company would manipulate old PDF lab reports from previous tests to forge the results.
"It's beyond outrageous that anyone would falsify COVID tests, as we allege happened here. If you get a negative test, you assume it's safe to go to work, visit family and friends, or take a vacation. But the victims of this alleged scheme might unknowingly have spread COVID to others or failed to receive timely and appropriate care themselves,'' said Feuer.
"I just got over COVID myself and know how essential it is to have accurate test results. This landmark resolution will stop this alleged scheme, give restitution to consumers and insurers, and impose severe penalties.''
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The complaint also alleged that Sameday Health would fake results for customers whose tests were never processed by labs. Sameday Health also allegedly charged insurance companies that were already paying for COVID-19 tests an additional fee for unnecessary medical consultations.
In a statement given to City News Service, Sameday Health responded to the settlement saying:
"Sameday Health was founded in September 2020 in an effort to make fast, reliable, COVID testing available to everyone. In the early days, amidst the chaos of massive surges in demand for services, and shortages in supplies, we failed to meet the standards for excellence our customers deserve.
"We have corrected the problems that arose back in 2020 and have made significant investments in compliance and systems to ensure that we meet our customers' expectations. We agreed to settle with the City Attorney and the LA District Attorney in order to move forward and to allow the 1,200 men and women of Sameday to place their focus on providing top-level service to the communities we serve.''
A second, $3.9 million settlement was reached with Dr. Jeff Toll, a Los Angeles-based doctor that the lawsuit alleged was a partner in Sameday Health's alleged insurance fraud. Sameday Health required people paying with insurance to consent to and participate in consultations with doctors to obtain a COVID-19 test, while people paying with cash were not required to obtain consultations, according to the complaint.
The phone calls with Toll would last two to three minutes and cost insurers about $450, the complaint alleged. In exchange for providing him with calls, Toll allegedly gave Sameday Health a large portion of the profits, according to the complaint, with Sameday Health making millions of dollars from California-based insurance claims alone.
Toll did not immediately respond to a request for a statement, but his attorney D. Shawn Burkley denied any wrongdoing to the Los Angeles Times, saying "We settled the matter, but we do not believe that Dr. Toll did anything that was unethical.''
Under the settlements, Sameday Health and Toll are required to pay restitution and civil penalties, with Sameday Health and Huettenbach agreeing to pay more than $9.5 million in restitution and nearly $13 million in civil penalties. Toll agreed to pay $1.5 million in civil penalties and more than $2.8 million in restitution.
The defendants are also prohibited from participating in the activities alleged by the complaints. Huettenbach is also prohibited from personally accessing any of Sameday Health's customers' medical records or test results. Sameday Health is also required to hire an independent monitor to ensure that it doesn't send fake test results to customers.
"My office is dedicated to protecting the people of Los Angeles County from dangerous and costly scams like these and seeking appropriate action against those who take advantage of consumers through fraudulent business practices,'' Gascón said. "It is not only illegal but also unconscionable to defraud people seeking medical assistance in the midst of a public health crisis. We will continue to work to bring justice to victims of all crimes, including fraud.''