California COVID contractor took $3.4 Million from taxpayers—Then billed twice

Orange County, California – An internal investigation by Orange County officials has raised troubling questions about one of the county’s most prominent COVID-19 testing partners, 360 Clinic. The company, which received more than $3.4 million in taxpayer funds during the pandemic, is accused of double—and in at least one case, triple—billing for COVID-19 testing services under its 2020 contract with the county.

The findings, outlined in a June 6 memo obtained by LAist through a public records request, stem from a probe led by Chief Compliance Officer Kelly Sabet. Her investigation followed a tip submitted to the county’s fraud hotline and included a review of billing records, internal emails, and communication with private insurers.

Sabet concluded that the Orange County Health Care Agency (HCA), which managed the testing contract, is “required to seek repayment from 360 Clinic for all payments that were fraudulently obtained.” She also called for a forensic audit of the contract. The case has now been referred to county counsel and the internal audit department.

Central to the probe is a $523,650 cashier’s check that 360 Clinic claims to have delivered to the county in December 2020. The payment, intended as reimbursement for county-advanced testing costs, went uncashed and unacknowledged for more than three years. The county says it never received the check. Emails provided by the company show a photo of the check and a bank statement confirming the funds were withdrawn. The check was eventually reissued in October 2024 after the county flagged the missing payment.

A spokesperson for 360 Clinic, Stuart Pfeifer, rejected the investigation’s findings, calling the memo “filled with serious unsubstantiated claims.” He criticized the county for not contacting the company during the investigation and questioned the credibility of an inquiry that omitted the initial issuance of the 2020 check.

The investigation builds on earlier reporting, which documented how former Orange County Supervisor Andrew Do, recently sentenced to five years in prison on unrelated bribery charges, pushed county staff to pay 360 Clinic despite concerns about denied insurance claims and potential overbilling. Internal emails show Do overrode red flags from agency leaders and directed staff to fulfill payments.

The compliance report found that 360 Clinic billed the county for services that Blue Shield of California had already reimbursed. One test, for example, was billed to the county twice and also paid by Blue Shield. The insurer denied other claims due to charges exceeding agreed-upon rates or lacking medical justification—issues that suggest possible “upcoding,” or billing for more expensive services than were provided.

The report also notes that 360 Clinic was formed just days before it secured the lucrative contract, which was rushed through under emergency pandemic rules without competitive bidding or a vote by the full Board of Supervisors.

As investigations continue, county officials—including Supervisor Janet Nguyen—are calling for further scrutiny. Nguyen has asked the U.S. Attorney General to examine Do’s involvement in both the 360 Clinic deal and a separate property contract linked to the same business partners.

Whether 360 Clinic engaged in fraud, miscommunication, or a combination of both, the case highlights the challenges of emergency governance—where speed, trust, and public money often intersect in complex ways, with few guardrails and even fewer records.