The Fresno Files

This is the full case file behind the Fresno section of KPSGILL.com’s investigation of healthcare enforcement. It separates three records that are often run together: a 2025 federal settlement with a hospital system and its technology affiliate; a False Claims Act case that continues against other defendants; and private correspondence, beginning in 2011, that predates both. Each is labeled by what supports it. None is offered as proof of the others.

Who is who

Verified public record The Fresno record involves organizations with overlapping histories and, in two instances, confusingly similar names. The table below follows the settlement agreement, the court’s orders and the current docket. F02F05F12

Shared technology, contracts or referral relationships should be examined through these specific entities. They do not make a hospital, a foundation, a technology company and a physician group into one legal person, and participation in a network is not proof of any participant’s knowledge, intent or responsibility.

The case is United States ex rel. Terpening v. Fresno Community Hospital and Medical Center, et al., No. 1:19-cv-01699-JLT-HBK (E.D. Cal.), assigned to a district judge and referred to a magistrate judge for pretrial matters. The court’s electronic docket uses the short title “Terpening v. United States et al”; the case number is the reliable identifier. F12F11

The May 2025 settlement

Settled, no liability determination Corporate integrity agreement On May 14, 2025, the U.S. Attorney’s Office for the Eastern District of California announced that CHS and PNA had agreed to pay $31.5 million to resolve allegations that they violated the False Claims Act “based on financial benefits provided to referring physicians.” The release described a custom-built lounge at PNA’s offices, known as HQ2, where expensive wine, liquor, cigars and meals were allegedly provided to referring physicians; EHR technology and equipment subsidies; and bonuses allegedly paid for clinical-integration activities whose real purpose, the government contended, was to reward referrals. It stated that “the claims resolved by this settlement are allegations only, and there has been no determination of liability,” and credited assistance from the FBI and the U.S. Postal Service Office of Inspector General. F01

What the money means

The agreement’s figures describe different obligations. Adding them together produces a number no document supports. F02F03

Payment was due within 30 days of the agreement’s effective date, jointly and severally by CHS and PNA. The relator’s share was conditioned on the United States receiving the settlement amount and interest. HHS-OIG’s listing records the settlement amount as $31,200,000. A settlement payment is not an inventory of every benefit exchanged, every reimbursed service or every possible loss; it cannot be substituted for a damages model. The converse is equally true: historical correspondence alleging a wider problem does not establish a larger proven loss. F02F03

The four categories of covered conduct

Government contention The agreement records four categories of conduct that “the United States contends” generated unlawful remuneration and false claims. They are the government’s contentions in an agreement that includes denials, not adjudicated findings against the settling organizations, the recipients or the remaining defendants. F02

The government also contended that the conduct created financial relationships between CHS and physician members of the Santé Health Foundation and the faculty medical group; that those physicians referred Medicare patients to CHS hospitals for designated health services; and that the relationships did not satisfy any Stark Law exception. The 35 providers who received clinical-integration grants are identified in Exhibit A only by initials. F02

Denials, releases and what was reserved

Verified public record The agreement states that it is “neither an admission of liability by CHS or PNA, nor a concession by the United States that its claims are not well founded,” and that “CHS and PNA deny the allegations.” F02

On payment, the United States released CHS and PNA from civil and administrative monetary claims for the Covered Conduct under the False Claims Act, the Civil Monetary Penalties Law, the Program Fraud Civil Remedies Act, the Stark Law’s civil monetary provisions and specified common-law theories. HHS-OIG agreed not to pursue permissive exclusion of CHS for the Covered Conduct, in consideration of the corporate integrity agreement, and expressly reserved its exclusion authorities as to PNA. F02

The agreement reserved, among other things, any criminal liability, any liability of individuals, tax liability, and liability for conduct other than the Covered Conduct. Both organizations agreed to cooperate with the government’s investigation of individuals and entities not released. The relator’s releases, and the stipulated dismissal, expressly did not extend to claims against Santé Health System, Santé Health Foundation, Central California Faculty Medical Group, or the two physician defendants. F02

Reserved claims are not evidence that any other proceeding exists. They define the edges of the release.

PNA’s status and the corporate integrity agreement

The agreement recites that PNA “intends to cease its active business operations on or about August 31, 2025, with a wind-down period thereafter.” That is a statement of intention; this investigation has not verified that the wind-down was completed. F02

CHS’s five-year corporate integrity agreement with HHS-OIG took effect May 7, 2025, with estimated completion in May 2030. It requires compliance leadership with board access, management certifications, training, independent review, a system for tracking arrangements with referral sources, documentation of business rationale and fair market value, and review of new or renewed arrangements before payment. F03F10

The government’s three positions

Court order On May 9, 2025, the United States filed a notice that it was intervening for purposes of settlement in part, declining in part, and not intervening at that time in part. The court’s May 13 order records three distinct positions: F04F12

• Intervention for settlement as to CHS and PNA. (The settlement agreement dates the intervention May 8, 2025.) F02
• Declination as to six individual defendants.
• No intervention “at this time” as to Santé Health System, Santé Health Foundation, Central California Faculty Medical Group and the two physician defendants — with the government informing the court that its investigation would continue as to them.

The order unsealed the original complaint, the notice and all future filings, while keeping other earlier papers sealed. It also provided that the United States may intervene later in the portions it was not then joining, for good cause, and that any proposed dismissal or settlement of those portions requires notice to the government. F04

These distinctions matter. A decision to let a relator litigate does not decide the merits, and an ongoing investigation is not a finding that an allegation is true. The May 2025 statement keeps its date: the record reviewed here does not establish the present state of any government investigation. F04L07

What was dismissed — and what remained

Court order The June 2025 order dismissed the claims against CHS and PNA with prejudice as to the relator. As to the United States, it dismissed the Covered Conduct claims with prejudice and other claims against those organizations without prejudice. Claims against the six individuals were dismissed with prejudice as to the relator and without prejudice as to the United States. The order concluded: “No other defendants or claims are dismissed, except as identified in this ORDER.” F05

That limits both accusatory and exculpatory accounts. The hospital settlement is not a judgment against the remaining defendants. The limited dismissal is not a judicial determination that every disputed arrangement was proper. “Remaining defendants” means exactly that — parties against whom litigation continues — and not “proven participants.”

The docket since the settlement

Verified public record Pending litigation The PACER docket report generated October 25, 2026 at 3:30 p.m. Pacific, current through docket entry 101, is the controlling procedural source for this edition. It supersedes the third-party docket indexes relied on in earlier drafts. F12

Sources: PACER docket report and court orders. F12F04F05F06F07

The pleading and the pending motion

The remaining defendants first moved to dismiss the original complaint in August 2025. On September 15, 2025, the relator filed a First Amended Complaint as of right, and the court terminated the first motion as moot. The remaining defendants moved to dismiss the amended complaint on October 13, 2025; the relator opposed on November 10 and the defendants replied on November 17. On November 18 the district judge ordered that the motion would be decided on the papers, noting that about 100 civil motions were under submission because of a judicial resource emergency and that a ruling was likely to take six months or more. No ruling appears on the docket through October 25, 2026. F12

This investigation has not yet reviewed the text of the First Amended Complaint. It therefore does not summarize the amended pleading’s theories, and it does not treat the absence of a ruling as a prediction of one.

The schedule

Court order A June 2026 order modified the case schedule at the parties’ request. The dates below remain subject to later orders. F06

Discovery

Court order After a July 29, 2026 discovery conference, the court’s August 5 order recorded a document production of approximately 1.8 million pages on July 1, 2026; the expectation of 10 to 12 additional non-expert depositions; and a non-expert discovery cutoff of April 9, 2027. It set three key-witness depositions for consecutive days between October 26 and October 29, 2026, required substantial completion of core document production within 45 days, called for a phased deposition plan, and required joint status reports every 60 days. F07

Those numbers describe the scale of discovery. They do not reveal what the documents prove: a large production can include duplicates, ordinary business records and material helpful to either side.

Pending litigation Unresolved October 2026 brought further activity. After a joint status report on October 6, the court set a discovery dispute hearing, then reset it to October 19 to address “the spoliation issue, which Defendant contends was not previously identified as within the scope of the informal discovery conference,” and “the postponement of two depositions.” The conference was held October 19; the minutes state that the court will issue a written order. The same day the court entered an amendment to the September 2026 stipulated confidentiality order. No written order following the conference appears on the docket through October 25. F12

A spoliation issue was placed on the conference agenda. The docket does not say who raised it, what it concerns or what was decided, and no finding of spoliation appears in the record. Nor does the docket show that any deposition was in fact postponed; the August deposition dates are simply not presented here as current.

Before the federal case

Questions about technology, physician independence, transparency and control

Private historical record The private archive described in this section was preserved by a Fresno physician. It establishes what was asked, asserted and answered at the time. It is selective — 27 email messages from 2011 to 2019 reviewed in full, together with the original 2015 letter and an earlier working review — and it is not an exhaustive record of anyone’s correspondence. It does not establish that its assertions were correct, and it is not proof of the allegations later resolved or still pending.

None of the reviewed correspondence addresses the HQ2 venue, the faculty group’s or the foundation’s EHR cost-sharing, or the clinical-integration grants that the settlement describes. Its subjects were technology access and price, data control, foundation governance, physician independence and access to records. H04H01F02

December 2011: the earliest recovered technology inquiry

Private historical record The earliest original inquiry inspected for this investigation is dated December 3, 2011. On December 5, Epic referred it to Community. On December 7, a PNA sales executive wrote: “Physician Network Advantage is the exclusive provider for EpicCare in the Fresno and Clovis area.” The message said EpicCare had launched at three pilot sites, with a general release expected in the second quarter of 2012. H04

That sentence is evidence of what the vendor represented at the time. It is not an adjudication that the arrangement was anticompetitive or unlawful; a competition claim would require evidence of an agreement or exclusionary conduct, a defined market and the other elements of antitrust law. L14

On December 12, the physician replied with practical questions: the price and a five-year commitment; who would own the practice’s data; whether billing and practice-financial information would stay confidential; what interfaces with outside laboratories and imaging centers would cost; and what would happen to access if hospital privileges changed. A $25,000 outside-interface expense in that message was a hypothetical, not a verified quotation. H04

The same message argued that PNA’s monthly price per provider exceeded what comparable hosted products cost, and that “special exceptions” to the kickback law allowed hospitals to let community physicians use heavily subsidized licensing. In other words, the 2011 objection was that the technology was too expensive — not a warning about the subsidies the government would later contend were unlawful. H04

The replies matter too. In early January 2012, PNA wrote that the questions had been discussed internally and that a response was being developed; a later message requested an intake questionnaire and raised a possible meeting with the chief executive. These are signs of engagement and should be read alongside the physician’s concerns. The reviewed messages do not establish whether a complete written answer, an executed contract or a final price schedule followed. H04

October 8, 2015: the seven-page letter

Private historical record The original seven-page attachment has been recovered unchanged. Its subject line reads “Depiction of Business of Medicine in the Shades of Grey.” It is styled as an open letter and was addressed to Santé Health System’s chief executive, whom the letter describes as the foundation’s registered agent. It bears a hand-delivery notation — the author’s own record, not a receipt — and an email sent the same day circulated it to local newspaper reporters. A later message asked that it be distributed to the foundation’s directors; that request does not establish that any director received or read it. H01H02

The letter frames an enduring governance question: who can actually make or override a clinical decision, and who can inspect the records that explain a nonprofit organization’s structure? It also contains disputed legal interpretations and broad characterizations that the record does not independently establish. Reprinting those as present-day findings would change the character of the evidence. KPSGILL.com preserves the letter as written and annotates it here.

The letter’s core concern — physician control of clinical decisions — is not a historical curiosity. California’s Medical Board guidance treats decisions about diagnostic tests, referrals, overall patient care and practice volume as the practice of medicine, and a statute effective January 1, 2026 now bars private-equity groups and hedge funds from controlling a closely similar list of decisions in physician practices. That statute does not govern nonprofit medical foundations as such; it is cited to show how current the question is, not to apply it to any Fresno entity. L12A07

October 2015: inspection, without copies

Private historical record The record shows a response, not silence. On October 16, 2015, the physician memorialized a telephone conversation with a foundation representative. On October 22, the representative wrote: “Are you available on Monday October 26th to inspect the Foundation’s exemption application, Form 1023? … As we discussed there will be no copying of the exemption application at this time.” The physician replied the same afternoon: “I don’t need to copy,” explaining that a third party might request copies from the Internal Revenue Service and asking to take notes. Messages on October 26 arranged the visit, and the physician replied that he was on his way. H03

Federal disclosure rules generally require tax-exempt organizations to make their exemption applications and recent annual returns available for public inspection and to furnish copies on request, subject to permitted charges and exceptions — including an exception when documents are made widely available. Whether the stated copying restriction violated those rules depends on the request, the documents, and the circumstances, which the exchange does not fully settle. L17

The correspondence establishes the request, the response, the inspection offer and the copying restriction. It does not establish what occurred during the visit, or a final legal violation. A separately referenced written response has not been recovered and remains a defined gap. H03

March 2016: the order of the messages

Private historical record The March 2016 record includes a PNA meeting invitation; an offer from a health-information-exchange manager to clarify the difference between exchanging data within Epic and across systems; the physician’s thank-you after the meeting; a senior PNA executive’s two-line reply — “Good luck with your initiatives” — sent at 4:46 p.m.; and, at 5:24 p.m., the physician’s longer follow-up. H05

The order is mandatory. The executive’s goodwill reply came before the physician’s substantive follow-up and cannot be read as agreement with anything in it. That follow-up described a regional data-exchange alternative and cited an out-of-state hospital system’s earlier kickback settlement as an analogy; the analogy is the physician’s argument, not an admission by PNA or evidence that it described Fresno. The follow-up also reported a call from an FBI agent that day and a planned meeting; the reviewed record does not independently corroborate that 2016 account. H05

June 2019: an FBI meeting whose subject the record does not establish

Private historical record Unresolved On June 10, 2019, an FBI agent thanked the physician for discussing “the reported issue” and asked to meet in person with a second agent. On June 11, the agent accepted a Friday-morning meeting at the bureau’s office, and the physician confirmed 9 a.m.; the Friday was June 14. On June 16 the physician thanked the agents for meeting. On June 18 the agent identified the second agent and named himself as the point of contact. Together, the messages support a meeting on or about June 14, 2019, at about 9 a.m. — before the December 4, 2019 qui tam filing. H06F02

The recovered correspondence documents federal contact months before the later qui tam action was filed. The currently available record does not establish the causal relationship, if any, between that meeting and the later litigation. The physician’s June 16 message describes the subject only as his “false claims allegations,” which he said “also resulted in violations of statutes enforced by DEA” — a subject that does not appear in the Fresno settlement’s covered conduct. No message names Santé, Community, PNA or the transactions later described in the settlement. A later recollection may propose a connection; it cannot retroactively put that connection into the original emails. The evidence that could test one — the materials actually given to the agents, a contemporaneous agency record of the meeting’s subject, or an authenticated account that can be compared with the pleaded transactions — has not been reviewed. H06

Two propositions are independently supported: the emails corroborate a June 2019 meeting, and DOJ’s 2025 announcement credits FBI assistance in the Fresno resolution. The record does not supply the bridge between them, and it does not reveal the FBI’s investigative scope or decisions. That leaves room for questions about how any particular report was handled. It leaves no room for a claim that the FBI had no role, ignored an established fraud, adopted every allegation, or owed anyone a particular outcome. F01H06L02

A tax return is a map, not a verdict

Verified public record The Santé Health Foundation’s federal returns are public. ProPublica’s Nonprofit Explorer, which extracts IRS e-file data, lists 2018 contributions of $26,405,002 for the foundation and shows more than one filing for the 2018 tax year. F13

Returns of this kind list independent contractors and the services they provided. They can direct attention to particular contracts and accounting records. Standing alone, they do not prove a kickback, an unlawful fee split, the amount of any federal claim or any government loss — and disclosure on a public return cuts against any inference that the entries themselves prove concealment. Similar names in a contractor list also require care: Community Foundation Medical Group, which appears in the foundation’s filings, is not Central California Faculty Medical Group.

Unresolved A privately supplied copy of the 2018 return reviewed for this investigation contains figures that have not been matched to the IRS-filed return. KPSGILL.com is withholding those figures until they are reconciled against the authenticated filing and any amended return. H07

Reading the record fairly

Analytical inference Contemporaneous concerns can become important evidence of notice, knowledge, institutional response and chronology — but only when linked to the conduct and claims actually at issue. Several points cut against overreading the Fresno archive, and a fair account states them:

• The author’s repeated legal conclusions are not independent corroboration of one another.
• The 2015 letter circulated beyond its addressee, so the presence of a copy in any organization’s files would not by itself show who received or read it.
• None of the reviewed correspondence addresses the conduct later settled; the 2011 messages objected that prices were too high.
• EHR integration and clinical-integration programs can have lawful purposes, and historically have had safe harbors and exceptions; each transaction must be tested against the rules in force at the time.
• The allegations settled by CHS and PNA cannot be imputed to the remaining defendants.
• Earlier concerns do not by themselves prove knowledge for later claims; defendants can point to legal ambiguity, different decision-makers, different transactions, remediation or reliance on advice.
• Theories about market division among regional health systems remain research questions without market data and evidence of an agreement. L14

Reviewed and approved for publication by Kanwar Partap Singh Gill, MD.