The Orange County Health Care Agency’s top compliance officer is calling for a forensic audit of the county’s dealings with its former COVID testing vendor after a review showed evidence of overbilling by the company.
The review found that the county repeatedly paid vendor 360 Health Plan, doing business as 360 Clinic, more than once for the same claim as well as for services already paid for by insurance companies.
“This raises serious concerns regarding the validity of all claims outlined in the uncollectable reports submitted by 360 Clinic,” the probe concluded. Uncollectable reports are a list of claims submitted to the county for payment after they were turned down by insurance carriers.
The probe showed that health care staff had concerns about 360 Clinic but were told to pay the company anyway, under instructions by former Supervisor Andrew Do. Do was sentenced June 9 to 60 months in prison after pleading guilty to federal charges of accepting more than $550,000 in bribes in exchange for doling out $10 million in pandemic relief money.
The federal case against Do involved the nonprofit Viet America Society. In a June 12 letter to U.S. Attorney General Pam Bondi, Orange County Supervisor Janet Nguyen urged federal prosecutors to now turn their attention to 360 Clinic, one of its principles, Larry Nguyen, and his brother, Gary Nguyen.
“The continued involvement of questionable businesses and government officials in government contracts continues to harm public trust and the integrity of our local government,” Nguyen wrote.
Suspicions went unreported
The probe’s conclusions were contained in a June 6 memo from Kelly Sabet, the Health Care Agency’s chief compliance officer, to agency chief Veronica Kelley.
Sabet noted that county staff failed to report its suspicions of abuse to the compliance office and fell short in overseeing the county’s $5 million contract with 360 Clinic.
“It is imperative the (Office of Compliance) is included in these discussions to ensure the issues are appropriately investigated and addressed in real time,” said the memo, recommending that employees be retrained on how to report suspected fraud, waste and abuse.
Allegations unfounded
A spokesman for 360 Clinic said Tuesday, June 17, that the county’s allegations were unfounded.
“This memo contains serious unsubstantiated claims alleged against 360 Clinic, some of which are demonstrably false and others in which 360 Clinic is unable to respond to further because it does not have sufficient information at this time,” said spokesman Stuart Pfeiffer.
Pfeiffer said 360 Clinic plans to meet with county health care officials to discuss the findings with an eye toward exonerating the company.
The fledgling group was hired in 2020 by the county to conduct drive-through COVID testing at so-called super sites, such as the Anaheim Convention Center and the Orange County Fairgrounds.
Another 15 walk-up testing sites were opened by 360 Clinic throughout Orange County, while the firm expanded to serve U.S. Navy personnel in San Diego and Bremerton, Washington. By May 2021, 360 Clinic had conducted more than 361,000 COVID tests, serving 12,000 clients a day at its 50 drive-through, walk-up and mobile sites, mostly in Southern California, according to the company.
Tipster sparked probe
An anonymous call to the county’s fraud line in August 2024 sparked the compliance probe, which reviewed county contracts with 360 Clinic, invoices, emails and other documents. Interviews also were conducted.
The review found that 360 Clinic had requested payment for services denied by Blue Shield, which had launched its own investigation into the company’s billing practices.
Essentially, Blue Shield was denying all claims by 360 Clinic, citing such reasons as “charges exceed fee arrangement” or “claim lacks information for medical necessity,” the memo said.
Concerned about whether to pay 360 Clinic, county health care staff sought counsel from then agency chief Clayton Chau, the memo said. In an email obtained by the Orange County Register, Chau responded: “Just talked to Sup Do. We should pay 360 to fulfill our contractual obligations.”
Staff leadership sent a follow-up email to Chau, requesting confirmation that the payments be made, but it went unanswered, the probe showed.
Double payments confirmed
The review found multiple cases of the county paying twice on the same claim from 360 Clinic.
As an example, the memo cited one case in which 360 Clinic submitted a claim to a private insurance carrier, was denied for “incorrect insurance,” then submitted it to the county for payment. The company then submitted a claim for the same service to another carrier, was denied for “missing information” and then submitted it to the county the next month and was paid again. The county paid twice for the same service, the memo said.
“Based on the Office of Compliance review of the documentation, it appears there was a lack of appropriate reconciling of the uncollectable reports submitted by 360 Clinic as evidenced by the same service being requested for reimbursement on multiple reports,” the memo said.
The report suggested that this same method may have been used to double-bill the county and the federal government.
“The Office of Compliance strongly suspects 360 Clinic may have obtained payment from (the federal Health Resources and Services Administration) for claims 360 Clinic included on the uncollectable reports and subsequently received payment from (the county) Health Care Agency,” the memo said.
The county could seek reimbursement from 360 Clinic for any money that was overpaid.
There were concerns that 360 Clinic was opening testing sites in other cities that were under the false impression that the county was involved, the review found.
“Internal emails exchanged regarding these situations indicated Health Care Agency leadership had significant concerns about 360 Clinic’s practices and HCA leadership was unsure how HCA can ‘keep 360 honest,’ ” the memo said.
The probe found that, on the whole, “there does not appear to be proper documentation of the issues or if they were even addressed appropriately.”
The memo said the health agency’s “standard business processes” were “adjusted” to get the services out to the people in a pandemic as quickly as possible.
Past issues
This is not the first time 360 Clinic has been called into question.
A whistleblower lawsuit filed last year accused 360 Clinic of scheming to illegally solicit kickbacks from doctors and defraud federal health programs. The suit by a former employee outlined the alleged plot to double-bill government agencies and collect kickbacks from doctors in exchange for referrals.
The COVID testing company was formed in 2020 at the height of the pandemic by Vince Tien, who ran a family-owned home nursing and hospice business, and his brother, Gary Nguyen, along with David Ngo, according to the suit. The lawsuit alleges they partnered with Dr. Linh Nguyen, who had been doing COVID-19 testing in Arizona.
According to federal court records, Linh Nguyen pleaded guilty in March 2024 to health care fraud related to his practice in Arizona and was sentenced to 24 months in prison. He cheated health care benefit programs, such as Medicare and Blue Shield, of $3.7 million from 2016 to 2021, according to his plea agreement. Linh Nguyen separated from 360 Clinic after the indictment.
The cloud over 360 Clinic caused the derailment of a Westminster senior center planned to open next month by the affiliated 360 PACE. The firm withdrew its plans before state and local regulators amid concerns over the fraud accusations.