The Lags Medical Centers at 3751 E. Shields Ave. in May 2021 closed along with its other locations. Photo by Breanna Hardy.

California Attorney General Rob Bonta announced a settlement Tuesday with the owner of Lags Medical Clinics, one of California’s largest chains of pain management clinics, over allegations that Dr. Francis Lagattuta defrauded Medi-Cal and Medicare of millions of dollars. 

Lagattuta and Lags Medical ran more than 20 facilities in California’s Central Valley and Central Coast and carried out medically unnecessary tests and procedures on thousands of patients, billing Medi-Cal and Medicare for those services for more than five years, according to Bonta’s office.

Several Lags Medical Center locations, including in Fresno, closed in May 2021.

“Thousands of Medi-Cal patients trusted Dr. Lagattuta to take away their pain,” said Attorney General Rob Bonta. “Instead he exploited their trust by carrying out arrays of unnecessary tests and billing for them over the objections of the doctors he employed. Billing for services that providers know are unnecessary undermines the quality of care that patients receive, and increases the costs to the Medi-Cal program. I am grateful to the U.S. Attorney’s Office for their partnership in this effort to hold Dr. Lagattuta to account. My office remains committed to pursuing justice against those who seek to abuse the Medi-Cal system for their own benefit.”

The settlement totals nearly $11.4 million, of which California will receive over $2.7 million. Additionally, over $130,000 will go to the state of Oregon, whose Medicaid program was also defrauded by Lagattuta. 

This settlement is the result of a nearly four-year investigation and data analysis by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse , the United States Attorney’s Office for the Eastern District of California and the U.S. Department of Justice. 

The investigation uncovered that from March 2016 through August 2021, Lagattuta and Lags Medical submitted claims for reimbursement to Medicare and Medicaid for medically unnecessary procedures and tests including skin biopsies, spinal cord stimulation procedures and urine drug testing.

In 2016, Lagattuta created a protocol for providers across his Lags Medical Clinics to conduct a series of procedures and tests on all patients, regardless of medical necessity, consent or request of a patient’s treating provider. As part of the protocol, providers were instructed to reduce pain medication for patients who did not consent to undergo certain procedures.

In 2018, Lags Medical terminated a contract with a pathologist who refused a request by the medical clinic to approve skin biopsy results without interpreting them himself. 

“Dr. Lagattuta and Lags Medical engaged in a brazen scheme to defraud Medicare and Medicaid of millions of dollars by inflicting unnecessary and painful procedures on patients whom they were supposed to be relieving of pain,” said U.S. Attorney for the United States Attorney’s Office, Eastern District of California, Phillip Talbert. “The United States Attorney’s Office and our law enforcement partners will use all of the tools at our disposal to stop fraud against federal health care programs and prevent patient harm.”

Lagattuta will be barred for five years from serving any Medi-Cal beneficiaries, billing for services to any Medi-Cal beneficiary, or receiving reimbursement for any services provided to any Medi-Cal beneficiary.