Telehealth Company and Physician Owner Pay Over $3 Million to Resolve False Claims Act Allegations

On June 10, 2026, the U.S. Attorney’s Office for the Northern District of California announced that San Francisco-based Circle Medical Care of California, Circle Medical Technologies, Inc., and their Chief Medical Officer and medical director, Dr. Nicole Tsang, D.O., agreed to pay a total of $3.325 million to resolve allegations that they submitted false claims for healthcare payments in violation of the False Claims Act (FCA). According to the government, the claims at issue allegedly identified rendering providers who did not actually provide or supervise the services billed.

Circle operates an online telehealth platform that provides mental health treatment and primary care services through contract providers, including nurse practitioners and physician assistants. The company submitted claims to federally funded healthcare programs, including Medicare, Medicaid, and TRICARE, as well as California commercial insurers.

The government alleged that, from January 1, 2018, through May 31, 2025, Circle submitted claims for services using the names and NPIs of providers who did not actually perform or supervise the services rendered. The government also alleged that Circle failed to properly supervise nurse practitioners and physician assistants who provided care to patients during that time period.

Under the settlement, Circle agreed to pay $475,000 to the United States and $2.85 million to the State of California. The matter arose from a whistleblower lawsuit filed under the FCA’s qui tam provisions. The whistleblower will receive over $1 million as part of the settlement.

As with most civil settlements, the claims resolved by the settlement are allegations only, and there has been no determination of liability.

Key Take-Aways

Proper Billing for Mid-Levels: It is crucial that healthcare providers understand the rules governing how to bill for services provided by mid-level providers such as Nurse Practitioners and Physician Assistants. Different payors have different rules regarding whether a practice can submit a claim for services provided by a mid-level under the name and NPI of a physician and, if so, what rules what rules must be followed, including proper supervision (commonly known as “incident to billing”). For example, while Medicare allows incident to billing if certain requirements are met (including “direct supervision”), but some state Medicaid programs (e.g., Georgia) do not allow such incident-to billing and instead require the practice to enroll their mid-levels directly and bill using their own name and NPI.

Telehealth Still Under Scrutiny: This and other recent enforcement actions make clear that federal and state enforcers continue to focus on the provision of, and billing for, telehealth services. Although telehealth is now a routine part of the healthcare delivery system, regulators continue to scrutinize whether services are medically necessary, properly documented, provided by appropriately licensed and credentialed professionals, and billed in accordance with applicable payor rules. Telehealth providers should not assume that the virtual nature of the encounter will lessen compliance expectations; if anything, the rapid growth of telehealth has made it an area where payors and enforcement agencies are likely to continue paying close attention.

GWB represents healthcare providers in connection with government investigations and False Claims Act litigation. If you need assistance with such a matter, contact us today.