PASADENA, Calif., Feb. 12, 2018 /PRNewswire-USNewswire/ -- Following up on claims that they have been unfairly and illegally targeted by government overreach and discrimination, Employee Health Systems Medical Group (EHS) today brought suit against the California Department of Managed Health Care (DMHC) and its director, Gov. Jerry Brown appointee Shelley Rouillard. The lawsuit, filed in the U.S. District Court for the Central District of California (Los Angeles Division), claims a recent DMHC Order exceeds DMHC authority, violates due process, and discriminates against minority-owned EHS in violation of state and federal civil rights laws.

The EHS suit stems from a December 26, 2017 DMHC Order requiring health plans contracting with EHS to transfer 600,000 EHS patients – 90 percent of them Medi-Cal recipients with few provider options - out of EHS's care. The DMHC Order was issued following a newspaper story detailing a whistleblower complaint that alleged misconduct by SynerMed, a medical services administration company and former EHS contractor who has been accused of a practice called economic profiling. Upon learning of the allegations in late October 2017, EHS terminated its contract with SynerMed.

While the Order directs health plans to terminate EHS physician network, it does not address or apply to other physician groups that contracted with SynerMed during the same period. Further, because the Order was directed at SynerMed actions and EHS is not named as a respondent to the Order, the physician group has no right to appeal the Order or request a hearing, one of the bases for the federal lawsuit.

"The DMHC and Director Rouillard's illegal targeting of EHS is simply unconscionable," said EHS spokesperson Denise Ng. "Despite the fact that EHS had no knowledge of SynerMed's alleged wrongdoing and that our medical professionals have proven over decades their deep commitment to our patients and the underserved, the DMHC Order outrageously smeared our physicians and damaged our company in violation of state and federal law."

"State regulators never contacted us about the allegations in the Order. And, there has been no investigation of the findings," said Ng. "There have been no complaints about our company or the care we provide."

"It's concerning when the government ignores its own laws as DMHC has done here," said Michael McClelland, an attorney and former DMHC Chief of Enforcement. "It's more concerning when the government targets with different treatment certain minority-owned medical groups serving minority communities. And it's reprehensible for the government to arbitrarily target EHS with no regard for the need of continuity of care of 600,000 of California's most needy."

U.S. Healthcare Homepage