Matrix and HealthFair Founder Agree to Pay $56.5M to Resolve False Claims Act Allegations

Community Care Health Network LLC (business name Matrix Medical Network) and HealthFair founder Shahriah “James” Ekbatani have agreed to pay a combined $56.5 million to resolve allegations that they submitted false diagnosis codes to the Medicare Advantage program in violation of the False Claims Act.

The government alleged that between 2014 and 2019, Matrix knowingly caused Medicare Advantage Organizations to submit invalid diagnoses for chronic conditions including diabetic retinopathy, atrial fibrillation, and COPD that were not supported by patient medical records. The scheme allowed insurers to receive inflated risk-adjusted payments from the Centers for Medicare & Medicaid Services. Similarly, HealthFair, which operated mobile health buses staffed by nurse practitioners, was accused of reporting unsupported or invalid diagnoses, including HIV/AIDS, metastatic cancer, and congestive heart failure, without proper documentation between 2015 and 2017. The company acted at the direction of Ekbatani, who was required to pay $15 million personally.

The settlements resolve two separate qui tam whistleblower lawsuits filed by a former Matrix employee and a former HealthFair chief medical officer. Under the False Claims Act, the whistleblowers will receive $7.3 million and $3.6 million, respectively, as their share of the recovery. The combined payments include $36.5 million from Matrix, $5 million from HealthFair, and $15 million from Ekbatani. Assistant Attorney General Brett A. Shumate noted that the Justice Department remains vigilant in pursuing Medicare Advantage organizations, downstream entities, and individuals who do not play by the rules. Individuals who have knowledge of similar Medicare fraud or illegal billing practices are encouraged to seek legal guidance from experienced whistleblower attorneys to explore potential False Claims Act remedies.