‘Beyond outrageous’: L.A. company faked COVID test results, authorities allege
A company accused of handing out fake results for hundreds of coronavirus tests will pay more than $20 million in a settlement announced by Los Angeles City Atty. Mike Feuer.
Feuer and Dist. Atty. George Gascón accused Sameday Technologies and its chief executive, Felix Huettenbach, of sending fake results to hundreds of people, telling them they had tested negative for the coronavirus when laboratories had not actually run their tests. Some tests were never processed at all, according to the complaint filed in court Wednesday.
More than 500 test results are “confirmed or suspected to be faked, falsified, or forged,” the attorneys wrote. In their complaints, they alleged Sameday would forge a negative result — at the direction of its CEO — when someone who had not gotten their result in time complained or threatened to report the company.
Sameday said in a statement that it was founded in September 2020 “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,” the company said. “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.”
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In the settlement agreement being proposed to the court, the company agreed to pay $22.5 million, including more than $9.6 million in restitution and nearly $13 million to the city and county to enforce consumer protection laws.
Under the settlement, Sameday is also required to comply with a court injunction banning it from making false claims and engaging in other illegal business practices. A spokesman for Feuer said the settlement deal must be approved by the judge.
Dr. Jeff Toll, a physician who was accused of teaming with the company to get reimbursed by health insurers for medically unnecessary consultations, also agreed to pay nearly $4 million to resolve allegations of insurance fraud, the city attorney’s office said.
D. Shawn Burkley, an attorney representing Toll, denied any wrongdoing: “We settled the matter, but we do not believe that Dr. Toll did anything that was unethical.”
Feuer and Gascon alleged that Sameday promised it could turn around results in 24 hours for a $195 charge, but “the promise was false — Sameday could not guarantee a 24-hour turnaround time” because its contracts with outside labs “expressly stated that they could not deliver results that quickly.”
Unable to provide results as quickly as promised, the company soon began faking coronavirus test results by taking reports from previous consumers who had tested negative, then changing the name, dates and other identifying information to match the new person, the L.A. attorneys alleged.
They also alleged that Sameday engaged in health insurance fraud, working with Toll to charge insurance companies an additional fee for “medical consultations.”
Sameday steered people to the doctor for “medically unnecessary” consultations that he submitted for reimbursement from health insurers, and the company got the bulk of his profits for the consultations, their complaint alleged.
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To rack up more insurance claims, Sameday also set up a virtual call center for physicians who were supposed to do roughly 100 consultations a day — each of them three minutes long — which occurred after people had already taken their coronavirus tests and, in many cases, gotten a negative result, the complaint alleged.
The attorneys alleged that more than 80,000 claims were submitted to health insurers for medically unnecessary consultations and the company collected millions of dollars from California-based insurance claims.
“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,” Feuer said in a statement.
The $22.5-million settlement with Sameday includes more than $5 million in refunds for people who got tested through the company, including California consumers who paid out of pocket for a PCR test from the company between Oct. 1 and Dec. 31, 2020.
The amount of restitution will be tied to how much the consumer paid for the tests, Feuer said.
The city attorney said that as far as he knows, the alleged fake results occurred between Oct. 1 and Dec. 31, 2020, but that if anyone got a Sameday Health result that didn’t make sense or looked strange — for instance, if there was an abrupt change in font for the dates of their results — they should reach out to Sameday even if the test occurred outside that period.
If they don’t get an adequate response from the company, “anyone who is concerned can go to our website or call our office,” Feuer said.
Sameday Technologies, which has been doing business as Sameday Health, is based in Los Angeles and has been offering coronavirus testing across the country, advertising itself on its website as “the most trusted COVID-19 testing solution for teams and businesses.”
In a television segment sponsored by the company, Huettenbach said that the downside of PCR testing is that “it usually takes a bit longer because you have to transport the samples to a laboratory to get them processed. But we’ve nailed the logistics of that down so in most of our locations it’s less than 24 hours.”
Sameday Health has faced concerns about its business practices before: In December, New York Atty. Gen. Letitia James sent a warning letter to the company for “misleading advertising” on the speed of its testing results, stating that consumers were waiting longer than Sameday had promised after paying for expedited testing.
Earlier this year, her office announced that Sameday was refunding more than $230,000 to thousands of customers who were charged for expedited results.
The company has also been sued over its employment practices.
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One of those lawsuits, brought under a California law that enables aggrieved employees to seek civil penalties for themselves, other workers and the state, alleges that the company misclassified workers as independent contractors and paid them “based on an unrealistic 40-hour workweek assumption; in reality, to do the job correctly, they were required to spend 40-60 hours of work per week without payment of required wages” including overtime.
That case is still pending.
In another suit against Sameday alleging wage violations, the company recently said in court filings that it did not oppose a motion to tentatively approve a class-action settlement — which would include a payment of $300,000 by the company and other defendants — but did not accept the premise that the class members were “employees.”
Sameday said Wednesday that it had no additional comment on the matter.
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