Home health care company to pay Indiana $416K to settle case

AG Zoeller: Patient used False Claims Act to stop fraud against Medicaid

INDIANAPOLIS – The State of Indiana will receive more than $416,000 in a settlement with Maxim Healthcare Services Inc. to resolve allegations that the company overbilled Medicaid for in-home nursing and home health aides, Indiana Attorney General Greg Zoeller announced today.

The total settlement Indiana Medicaid will receive, $416,612, is part of a larger $130 million settlement that Maxim Healthcare Services will pay 41 states and the federal government under the agreement, to resolve allegations of overbilling and fraudulent billing of Medicaid by Maxim.

An investigation by the U.S. Justice Department and the states alleged that between 1998 and 2009, Maxim Healthcare Services submitted false billings to the Medicaid program for services to patients that were not provided, or submitted claims that were improperly documented and not reimbursable. The Indiana Attorney General’s Medicaid Fraud Control Unit (MFCU) participated in the settlement process.

The investigation began after a private plaintiff – a patient of Maxim who discovered that Medicaid was being overbilled for the services he received – filed a qui tam or whistleblower lawsuit under the False Claims Act in the U.S. District Court in New Jersey. The whistleblower, a New Jersey resident, will receive a percentage of the federal recovery in the settlement.

“At both the state and federal levels, the False Claims Act statutes are tools that whistleblowers courageously have used to expose and stop fraud against the Medicaid program. This case is all the more remarkable because the whistleblower was not a company insider, as is typically the case, but instead a patient who realized Maxim was falsely billing Medicaid for services it had not provided him,” Zoeller said.

Under the agreement, Maxim must pay a total civil settlement of a combined $130 million to the federal government and states. Most of that, approximately $121.5 million, will go to reimburse Medicaid, the state-administered healthcare program for low-income and disabled people that is funded jointly by the states and federal government. The remainder of the civil recovery, $8.5 million, will reimburse the Veterans Affairs program, the agreement said.

As its state share of the Medicaid restitution, Indiana will receive $208,306 under the agreement, plus another $208,306 in additional state recoveries, for a total settlement of $416,612.

Based in Columbia, Maryland, Maxim Healthcare Services has 11 provider locations in Indiana.

In addition to the civil settlement, the U.S. Department of Justice obtained guilty pleas to criminal charges from several Maxim employees, and the company entered into a deferred prosecution agreement. Maxim also signed a corporate integrity agreement with the U.S. Department of Health and Human Services and will hire a corporate monitor, at company expense, to ensure compliance with the terms.

Since January 2009, the Indiana Attorney General’s Office has participated in numerous settlements of qui tam (pronounced “key tam”) whistleblower lawsuits against pharmaceutical companies and has reached settlements of more than $24 million in Medicaid restitution and additional state recoveries.

To encourage whistleblowers to file suit and in turn expose health care fraud, Zoeller’s office has raised public awareness about the Indiana False Claims and Whistleblower Protection Act through informational meetings and outreach to health care workers and attorneys. Zoeller and the MFCU staff have made several presentations about filing whistleblower lawsuits to meetings of health care employee associations, nursing students and attorneys.

Any health care or pharmaceutical workers or private individuals who know about fraud and are interested in filing a whistleblower action against a company should first contact a private attorney who specializes in bringing lawsuits under the False Claims Act. There is no guarantee of the individual recovering damages; but filing a private lawsuit is a necessary first step in order for states or the federal government to investigate a fraud case and intervene in the lawsuit in court. Zoeller urges anyone interested in bringing a whistleblower action to learn more about the process by visiting his web site, www.in.gov/attorneygeneral/2807.htm