This company was accused of exploiting the coronavirus testing boom to reap millions

Katy Strouk said she was puzzled last year when, after getting her nose swabbed for her coronavirus test, she was pointed to a woman seated at a table in the parking lot. The Brentwood resident walked over and answered a few questions about how she was feeling, then headed off to work in the Fairfax district, she said.

Strouk was even more puzzled when she got the paperwork from her insurance company, which listed more than $600 in charges from “Jeff Toll Md Inc.”

“Who’s Dr. Toll?” Strouk recalled thinking. The Brentwood resident said she quickly phoned her insurance company and told them, “I didn’t have any doctor consults.”

Her claims echo key allegations in a case brought by Los Angeles city and county officials, who have alleged that perfunctory chats with physicians were at the heart of a fraudulent scheme that reaped millions from health insurers.

Sameday Health, a start-up offering coronavirus testing, was accused by authorities of steering insured patients to Toll’s company, Jeff Toll MD Inc., for “medically unnecessary consults” in exchange for a hefty cut of its profits.

Neither has admitted to the allegations under a pair of recently announced settlements; Toll “vigorously denies that he did anything wrong,” his attorney said.

A company accused of handing out fake results for hundreds of coronavirus tests will pay more than $20 million in a settlement with the city of L.A.

Their alleged actions, as described by the Los Angeles city attorney and the county district attorney in civil complaints, capitalized on federal laws that were meant to smooth the way for people to get tested without fretting about the bill.

Based on the allegations laid out in court filings, it looks as though “they just took advantage of the weaknesses in the oversight and monitoring of these activities,” said Glenn Melnick, a USC professor and expert in healthcare economics and finance.

Sameday was also accused in a complaint of handing out hundreds of fake results when it struggled to turn around tests as quickly as it had promised — an alleged act that City Atty. Mike Feuer called “beyond outrageous.”

The company and its chief executive are poised to pay over $22 million to settle the claims from the L.A. city attorney and district attorney. Toll reached a separate settlement for nearly $4 million announced by authorities.

In a statement, Sameday said that in its early days, amid surging demand and supply shortages, “we failed to meet the standards for excellence our customers deserve,” but had “corrected the problems that arose back in 2020.”

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“To continue operating and serving our customers and our communities, we made the decision to settle the claims,” the company said.

Toll, who said he no longer has a contractual relationship with Sameday, has denied wrongdoing and said he settled the matter because it would have cost more to contest the allegations. His attorney said the bulk of the $2.8 million in restitution funds for insurers, included in the nearly $4-million settlement, were being provided by Sameday.

In a statement provided by his attorney, Toll said he didn’t do consultations himself, but had engaged physicians to perform them for patients who went to Sameday sites.

California Controller Betty Yee sent a series of text messages in 2020 to promote a $600 million deal for the state to purchase protective masks from a startup healthcare supplies company.

Those doctors, who worked as independent contractors with his company “Jeff Toll MD Inc,” gave medical advice about COVID-19 symptoms and exposures and educated patients about quarantining and vaccines, Toll said. Neither the doctor nor his company “knowingly billed for work that was not actually performed,” his attorney wrote.

“Dr. Toll categorically denies that any laws were intentionally broken,” he said.

The settlement deal announced in April does not prohibit Sameday from being criminally prosecuted over the allegations, according to a Feuer spokesperson. The Medical Board of California, which licenses and disciplines medical doctors, said it was aware of the case filed against Toll and was looking into it.

Sameday Health was co-founded by Felix Huettenbach, a tech entrepreneur in his late 20s, who has said the company’s mission was “to disrupt the American healthcare system.”

Huettenbach grew up in Germany. He said on his LinkedIn profile that at age 10, he was living in a Shaolin monastery where he learned kung fu and “endured nine-hour training sessions, seven days a week.” At the monastery, he learned the value of “monitoring your health, and taking action to strengthen it.”

Huettenbach told VoyageLA that he had founded three companies by the age of 23 — an events management business, a travel agency and a developer of fitness equipment. He said he had also worked at Quantgene, a biotech company based in Santa Monica, before he decided to leap into the business of coronavirus testing.

Sameday launched in September 2020 and opened its first site in Venice. The company promised customers that for $195 they would “get results the next morning” — but the labs it was working with hadn’t agreed to process tests within 24 hours, according to the complaint against Sameday.

By the second weekend it was operating, the company began faking test results, according to the complaint. Authorities alleged that at Huettenbach’s direction, the company began forging test results by taking old PDFs of the results sent to other customers who had tested negative and changing the name and date.

More than 500 test results were confirmed or suspected to be “faked, falsified or forged,” the complaint alleged. Those accusations spurred alarm and outrage when L.A. authorities unveiled them: Giving a negative result to a patient who is actually infected could cause them to unknowingly infect others or delay treatment.

But the faked results were just part of the fraud, authorities alleged. Sameday had also found a way to cash in on insurance payments beginning in November 2020, they alleged, after the company entered into a contract with Dr. Jeffrey Toll.

Toll graduated from medical school in 2014 and performed his residency at Cedars-Sinai. He has a private practice on Century Park East, where he offers concierge services to patients who pay a membership fee.

Aided by the arrangement with Toll, Sameday created a system where there were two paths for customers signing up for a test — one for those paying out of pocket and another for those with insurance, the L.A. authorities alleged in their complaint. Only the insured were required to talk with a doctor, authorities alleged, and their insurer was then billed an additional $450 for a “consultation.”

The consultations lasted two or three minutes, but Sameday “fraudulently upcoded” them and claimed to insurers they had required “30 to 44 minutes” of physician time, authorities alleged in the complaint against Sameday.

Sameday “targeted and steered insured customers” to Toll’s private practice for “medically unnecessary consults,” and in exchange, his practice contracted to pay 75% of its profits to Sameday as a “referral fee,” according to the complaint against Toll.

Toll said he “has no knowledge of any visit that was not medically justified” and “does not believe that any of the claims were intentionally falsely upcoded.” Patients gave their consent to see a physician electronically on the Sameday website, his attorney said.

Toll said his company had agreed to a percentage of revenue for “lawful services” from Sameday, including the web platform it developed that managed both testing and physician services, which he described as “a legal, widespread feature of many telehealth providers’ websites.”

Calling that a referral fee is “misleading,” he said, and the relationship was not “steering,” but a common practice “set up for patient convenience at a time of extreme anxiety about COVID.”

Authorities alleged that Sameday turned in claims for “tens of thousands” of consultations that were misrepresented or “never even happened.” Doctors worked from “a virtual call center,” where they were expected to conduct 100 three-minute consultations each day, according to the civil complaint.

By late 2020, Sameday had set up testing sites throughout Southern California and expanded to Maryland and D.C., authorities said. Today it has sites in at least 14 states, according to its website.

The alleged fraud appears to have been aided by language in federal laws, including the CARES Act, which passed in March 2020 to help Americans through the pandemic. The laws generally require insurers to pay for coronavirus tests and “items and services furnished” during healthcare provider visits that result in an order for a test.

The legislation also said insurers must pay for those tests and services even if the testing site was outside the insurance company’s network of approved providers. The insurers were required to pay the prices the testing sites listed on their websites, which some experts have said created an incentive to charge excessive prices.

The California Assn. of Health Plans found in a survey of its members that out-of-network COVID testing costs far exceeded those for tests that were in network, according to spokeswoman Mary Ellen Grant.

Sameday has been listing a $450 price on its website for a “low complexity” medical consult.

The federal pandemic laws also said that insurers could not collect money from patients for the tests — language meant to encourage Americans with symptoms to get tested.

Whenever the patient does not have to bear the costs of healthcare, it’s “going to be more prone to fraudulent activity,” because patients are less likely to notice and contest charges if their insurers are covering the bill, said Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy.

But with COVID-19 overtaking the U.S. and patients in need of prompt testing to stop its spread, “obviously there’s a tradeoff — the government is willing to accept that some fraud is going to happen in order to provide the benefit to others,” Adler said.

Some people who spotted and grew upset about charges after a Sameday test said they were initially told by their insurers that they were on the hook for some or all of those bills.

Many Californians could be eligible for refunds under a settlement struck with an L.A.-based company accused of faking results for hundreds of coronavirus tests.

Strouk, the Brentwood resident, left a one-star review for Toll on Yelp, writing, “What kind of doctor has a medical student meet you in a parking lot asking the same questions you get asked at every business, ‘do you have any symptoms, etc?’ And then charges your insurance $602 … Shame, shame, shame!!!!!”

Records of the insurance claim, which Strouk shared with The Times, listed Jeff Toll MD Inc. as a “Doctor Out of Network.” Blue Shield had paid roughly $126 of the $602 charge, while the remaining amount was listed as “Patient’s responsibility.” Strouk said she called her insurance to contest the charge and did not ultimately pay it.

Her complaints were echoed in other online reviews on Yelp and Google, sandwiched between glowing reviews of the doctor. Another was left by the father of Lauren Lee, who needed a coronavirus test before she traveled abroad.

Lee said she got tested by Sameday Health in Venice. Her Anthem Blue Cross paperwork, which she provided to The Times, listed a $450 charge for an “office visit” and $150 for “medical care.” The paperwork listed the doctor as “JEFF TOLL MD INC.” Lee said her father helped her challenge the $600 charge and “it was eventually just dropped.”

In an email, Lee told a city investigator that she was “quite certain” that she had “never met a Dr. Jeff Toll, nor did I have any ‘office visit’ with him.” Nor did she remember having a telehealth appointment or speaking to any other doctor at length for the appointment.

Toll, in the statement provided by his attorney, said all of the doctors he engaged were licensed physicians, not medical students. Patients might have been confused to see “Jeff Toll MD Inc” on their insurance paperwork, but that simply reflected the fact that the physicians were contracted through the company named for him, he said.

And insurance paperwork may list an “office visit” even if it took place at a Sameday site, he added. Toll also said that although his company had gotten hundreds of requests from insurance companies for billing records in the matter, “only two resulted in requests for reimbursement — and then only for relatively insubstantial sums.”

“Dr. Toll recruited and organized a team that saw well over 100,000 patients, and the fact that only a small number of people had any confusion or complaints reflects positively on his efforts,” the statement from his attorney added.

This content was originally published here.