On September 19, 2016, the U.S. Department of Justice announced that North American Health Care (NAHC) and its top officials have agreed to pay $30 million to settle allegations that it sought payment from Medicare and TRICARE for therapy services its residents did not need. NAHC is based in Orange County and most of its 35 skilled nursing facilities are in California.
NAHC agreed to pay $28.5 million while its chairman, John Sorenson, will pay $1 million and Margaret Gevelzon, a senior vice president, will pay $500,000 under the settlement. The government contends Gelvezon created the illegal billing scheme and Sorenson reinforced it. NAHC entered into a five-year Corporate Integrity Agreement with the HHS Office of Inspector General that requires annual independent review of therapy services to Medicare.