NEWARK N.J.鈥擧ome health-care provider Maxim Healthcare Services Co. has agreed to pay $150 million as part of a settlement with federal and state authorities to resolve criminal and civil allegations that it falsely billed government health-care benefits programs.
The privately held, Columbia, Md., health-care provider reached the deal to resolve claims by attorneys general in more than 40 states and the U.S. Attorney’s office in New Jersey.
Maxim Healthcare also agreed to enter into a criminal deferred prosecution agreement with the U.S. Attorney’s office in Newark, which alleged the company defrauded Medicaid and the U.S. Department of Veterans Affairs programs out of $61 million between 2003 and 2009. The company received more than $2 billion in reimbursements from government programs in that period.
Nine individuals, including eight former Maxim Healthcare employees, also have pleaded guilty to criminal charges, said acting U.S. Attorney J. Gilmore Childers. Three of those charged were former regional managers in the company responsible for “tens of millions of dollars in revenue” annually, he said.
“Fraudulent billing for services not rendered uses patients as pawns in a game of corporate greed that puts cash over care and wastes precious taxpayer dollars,” said Tony West, assistant U.S. attorney general for the Justice Department’s Civil Division, at a press conference in Newark on Monday.
State and federal authorities alleged that Maxim Healthcare submitted false claims to government health-care benefits programs for services that weren’t provided; submitted government health care benefits program claims that were improperly documented; and operated health care staffing offices that were not licensed under applicable state laws and regulations.
“Companies like Maxim, that provide health care services to Medicaid patients, are expected to take necessary steps to prevent fraud and abuse by instituting strong compliance programs and maintaining effective internal controls,” New Jersey Attorney General Paula Dow said Monday. “Failure to do so will not be tolerated.”
The improper activity allegedly went back as far as October 1998, Ms. Dow said.
The probe, which lasted more than five years, was initiated by a whistleblower complaint by a Medicaid patient who lived in Ocean County, N.J., Ms. Dow said.
The patient, who filed a whistleblower lawsuit, alleged that Maxim Healthcare claimed more than 700 hours of services that weren’t provided to him over a 15-month period beginning in 2003, Ms. Dow said.
Maxim Healthcare will pay $130 million to resolve federal and state civil allegations and a $20 million fine under the deferred prosecution agreement.
It also has entered a corporate integrity agreement, which requires an independent corporate monitor and annual reviews of its compliance by its board of directors. The company cooperated with the probe.
“While we regret the circumstances that led to this settlement, we have taken this opportunity to review our operations closely and strengthen our infrastructure, including our systems, policies and procedures,” said Brad Bennett, Maxim Healthcare’s chief executive, in a statement. “This marks the beginning of a new chapter for our company. Maxim Healthcare remains strong and steadfast in its commitment to providing high quality care to the patients we serve.”
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