Circle Medical, a San Francisco telehealth and primary care company, agreed in June 2026 to pay $3.325 million to settle a federal whistleblower lawsuit alleging it billed Medicare, Medicaid, TRICARE, and California commercial insurers for telehealth visits that physicians named on the claims never actually performed or supervised. The Circle Medical lawsuit, filed under the False Claims Act, also named the company’s chief medical officer, Dr. Nicole Tsang. Neither Circle Medical nor Dr. Tsang admitted wrongdoing.1U.S. Department of Justice. San Francisco Company Agrees to Pay Over Three Million Dollars to Resolve Allegations They Submitted False Claims for Healthcare Payments
What Circle Medical Was Accused Of
From January 2018 through May 2025, according to the government, Circle Medical submitted telemedicine claims under the names and National Provider Identifier numbers of physicians who had not rendered or supervised the visits. The care was overwhelmingly delivered by contracted nurse practitioners and physician assistants working without the physician oversight the billing represented.1U.S. Department of Justice. San Francisco Company Agrees to Pay Over Three Million Dollars to Resolve Allegations They Submitted False Claims for Healthcare Payments
The visits at the center of the case were primarily for ADHD medication prescriptions. Circle Medical employed roughly 350 providers at the time, and the government alleged the encounters were being attributed to rendering physicians who played no meaningful role in the patient’s care.2Kessler Topaz Meltzer & Check, LLP. Telemedicine Company and Physician to Pay Over $3.3 Million to Settle Whistleblower Lawsuit Alleging Fraudulent Billing The conduct was charged as a violation of the federal False Claims Act and its California counterpart.3HHS Office of Inspector General. San Francisco Company Agrees to Pay Over Three Million Dollars to Resolve Allegations
Who Filed the Lawsuit
The case began as a qui tam action, a lawsuit a private citizen files on the government’s behalf under the whistleblower provisions of the False Claims Act. Jason Vellen filed the complaint under seal in 2024 in the U.S. District Court for the Northern District of California, captioned United States and State of California ex rel. Jason Vellen v. Circle Medical Care of California, Circle Medical Technologies, Inc., Dr. Nicole Tsang, D.O., and George Favvas, No. 3:24-cv-02024-TSH.4U.S. Department of Justice. San Francisco Company Agrees to Pay Over Three Million Dollars to Resolve Allegations
The United States and the State of California intervened in June 2026 to finalize the settlement. The settlement documents did not disclose Vellen’s relationship to Circle Medical.5Kessler Topaz Meltzer & Check, LLP. Telemedicine Company and Physician to Pay Over $3.3 Million to Settle Whistleblower Lawsuit
How the $3.325 Million Was Split
Under the agreement announced on June 10, 2026, Circle Medical and Dr. Tsang together agreed to pay $3,325,000. Most of that, $2.85 million, went to California. The federal government received $475,000.6Becker’s ASC Review. San Francisco Physician, Company Pays $3.3M to Settle False Claims The agreement did not break out a separate payment for Dr. Tsang.
Vellen, as the relator, received a share of the recovery: 17% of the federal portion ($80,750) and 35% of the California portion ($997,500), for a total of $1,078,250.7Insurance Journal. San Francisco Company Agrees to Pay Over Three Million to Settle False Claims Allegations
The settlement resolved the allegations without any finding or admission of liability. The claims remain allegations only.6Becker’s ASC Review. San Francisco Physician, Company Pays $3.3M to Settle False Claims
What It Means for Parent Company WELL Health
Circle Medical is a majority-owned subsidiary of WELL Health Technologies Corp., a Canadian company on the Toronto Stock Exchange. WELL took its majority stake, about 58% on a fully diluted basis, in November 2020 for roughly $14.3 million after an initial 2018 investment.8Newswire. WELL Health Enters US Market With Completion of Majority Stake Acquisition of Circle Medical Technologies
The investigation became public in late March 2025, when WELL Health disclosed that Circle Medical had received a September 2024 request for information from the U.S. Attorney’s Office about its billing practices. The disclosure delayed WELL’s 2024 annual audited financial statements,9WELL Health. WELL Health Announces Delay in Filing of Annual Audited Financial Statements and WELL Health shares dropped 16.7% on the next trading day.10Business in Vancouver. WELL Health Shares Plunge as US Investigates Billing Practices
WELL recorded an estimated $4.1 million settlement expense in its 2024 financial statements and deferred $56.6 million in Circle Medical–related revenue for that fiscal year.11WELL Health. WELL Health Announces Results for Q4 and Full Year 2024 By its Q2 2025 earnings call in August 2025, CEO Hamed Shahbazi said WELL had “multiple advanced conversations” about divesting Circle Medical and other U.S. assets, aiming to announce at least one divestment by the end of 2025.12Investing.com. Earnings Call Transcript: WELL Health Q2 2025
Where It Fits in Telehealth Enforcement
The settlement landed during a period of intensifying federal scrutiny of telehealth prescribers, especially those handling controlled substances such as ADHD stimulants. A 2022 HHS Office of Inspector General Special Fraud Alert flagged telemedicine schemes involving medically unnecessary services as a priority, and the DOJ has since pursued a series of supervision and billing cases in the digital health industry.13HHS Office of Inspector General. A Roadmap for New Physicians – Fraud and Abuse Laws
Circle Medical was one of several platforms that expanded ADHD treatment during the COVID-19 pandemic, when a provision of the Ryan Haight Online Pharmacy Consumer Protection Act allowed controlled substances to be prescribed by telehealth without an in-person visit. Done Global and Cerebral also drew federal scrutiny in the same space; Done Global’s founders were criminally indicted in 2024 over allegations that practitioners were directed to prescribe stimulants without adequate clinical justification, a case that also centered on supervision failures.7Insurance Journal. San Francisco Company Agrees to Pay Over Three Million to Settle False Claims Allegations The Circle Medical matter was civil, not criminal, and ended in a financial settlement rather than charges.