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CalOptima rescinds support of senior health center because of fraud concerns with ‘affiliate’

February 8, 2025

CalOptima Health, Orange County’s insurance plan for low-income residents, has rescinded its support of a new senior health center in Westminster, sending the multimillion-dollar project into limbo.

The CalOptima board of directors on Thursday, Feb. 6, pulled its 2023 endorsement of 360 PACE based on allegations of health care fraud against what staff members called an “affiliate,” 360 Health, which conducted mass COVID testing for the county.

The endorsement is needed to secure state and federal approval of the center, which is 95% complete in Westminster’s Little Saigon at a cost of more than $5 million. It was scheduled to open in July.

The board, however, left the door open to re-endorse the project after its staff looks into the allegations.

“Due diligence is the direction we need to go,” said board Chair Isabel Becerra. The vote was unanimous by the 11-member board, with Director Jose Mayorga absent.

CalOptima Chief Operating Officer Yunkyung Kim said in an interview Friday that staff will report back to the board in 30 days.

“This is the first time we have rescinded a letter of support. We did not make that decision lightly because we do understand PACE is a valuable program for older adults,” Kim said.

Facility much needed

Vietnam refugee Hahn Le, 70, on Thursday told the board that 360 PACE is much needed in the community.

“We have longed for a place like 360 PACE, a center where we can come together, find comfort,” Le said. “A place where we can find and regain a spirit of belonging, where we can heal.”

Stuart Pfeifer, a spokesperson for 360 PACE attorney Eliot Krieger, said the group is hopeful that CalOptima directors will renew their support.

“We were encouraged that the board said this was not a final decision,” Pfeifer said. “We look forward to working with CalOptima on their investigation. We are confident that, once they understand the facts, they will reinstate their letter of support.”

Speaking before the CalOptima board on Thursday, Krieger said 360 PACE was not an affiliate of 360 Clinic, the operating name for 360 Health.

However, Kim said 360 PACE’s application package for a letter of support said it was affiliated with 360 Health in multiple places. They “self-identified,” she said.

CalOptima released to the Orange County Register the application papers — as well as letters of support sent by local government officials, medical services and community groups — which refer to 360 PACE’s affiliation with 360 Health.

The operations plan submitted by 360 PACE identifies the company as a “subsidiary” of 360 Health, touting 360 Health’s experience providing COVID tests to more than 400,000 Orange County residents.

Pfeifer said, “At the time that it applied for CalOptima’s support, 360 Clinic was owned by several entities. Some of the minority owners of some of the entities that owned 360 Clinic also have ownership interest in 360 PACE. … That said, 360 Clinic is not an affiliate of 360 PACE. 360 Clinic has effectively been out of business for four years.”

The 360 PACE center would follow the state model as a “program of all-inclusive care for the elderly.” That model provides health and other services aimed at keeping senior citizens at home rather than at a nursing facility. There are at least two other CalOptima-endorsed PACE centers in Anaheim and Santa Ana, as well as one run by CalOptima, which opened in 2013 in Garden Grove.

PACE programs are funded by Medicare and Medicaid dollars and must be approved by the state Department of Health Care Services and the federal Centers for Medicare and Medicaid Services.

Whistleblower lawsuit

CalOptima’s concern over 360 PACE was sparked by a whistleblower lawsuit filed in May 2024 that alleged 360 Clinic schemed to illegally solicit kickbacks from doctors and defraud federal health programs.

The suit alleges that 360 Clinic double-billed government agencies for the tests and plotted to get kickbacks from physicians for referrals.

The litigation by former employee Laura Garcia also accuses 360 Clinic officials of conspiring to send patients to medical services either owned by the firm or by relatives of company officials, a violation of federal and state regulations against physician self-referrals.

Pfeifer responded that Garcia’s allegations were “meritless.”

“Ms. Garcia spent one month at 360 Clinic — half that time in employee orientation and training — before her position was eliminated when the company made the decision to shut down,” he said.

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 Gary Nguyen, along with David Ngo, according to the suit. The lawsuit alleges they worked 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.

Pfeifer noted Linh Nguyen separated from 360 Clinic after his indictment.

Allegations against 360 Clinic

Garcia alleged in her lawsuit she was laid off to keep her from reporting that 360 Clinic was:

Falsely reporting to the federal Health Resources and Services Administration that patients had been asked if they had private insurance or the means to pay for the tests.
Intentionally reporting that initial COVID tests results were either “misplaced” or “false,” bringing the patients back for retests that were not needed and could be billed again.
Staffing the test sites with family members or people who had a business relationship with the executives in order to promote the schemes.

360 Clinic also is being audited by the county, which is looking at all of its pandemic contracts. That scrutiny comes after former Supervisor Andrew Do pleaded guilty in federal court to accepting more than $550,000 in bribes to funnel $10 million in pandemic money to the nonprofit Viet America Society.

The money was supposed to be used to feed shuttered seniors and build a Vietnam War memorial, but only $1.4 million was actually spent on meals and the memorial was not completed. According to Do’s plea agreement, some of the money to Viet America Society also went to his two adult daughters.

Orange County Register

News Details

CalOptima rescinds support of senior health center because of fraud concerns with ‘affiliate’

Facility much needed

Whistleblower lawsuit

Allegations against 360 Clinic

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