Maryland health-care company pays $150 million to settle fraud probe

Federal authorities have announced a $150 million settlement with one of the nation’s largest health-care providers over charges of defrauding Medicaid and Veterans Affairs programs.

Maryland-based Maxim Healthcare Services has agreed to pay penalties to the federal government and 42 states to resolve the case.

New Jersey’s acting U.S. Attorney Gilmore Childers says nine people have also pleaded guilty to felony charges.

“The conduct and admissions of these individuals shed light on a culture that emphasized sales goals at the expense of clinical and compliance responsibilities,” Childers said Monday.

Assistant U.S. Attorney General Tony West says the settlement is the largest of its kind for the Justice Department.

“In this case, Maxim defrauded taxpayers out of $61 million which is unacceptable,” West said. “Ultimately, each of us winds up footing the bill in higher health-care costs.”

Investigators say the issue came to their attention after N.J. resident and Maxim beneficiary Richard West filed a whistle-blower lawsuit under the False Claims Act.

He discovered there was problem, the assistant U.S. attorney general said, “when he one day received a notice that he was in danger of reaching the cap, of exceeding the limits of his health-care coverage because of services Maxim had supposedly provided to him, Richard was surprised because he hadn’t received many of the services he was being billed for.”

In the deferred prosecution agreement announced Monday, Maxim will pay a criminal penalty of $20 million and civil penalties totaling about $130 million to Medicaid programs and the Veterans Affairs program.

Authorities, who have investigated the company for five years, charged it with conspiracy to commit health-care fraud by submitting claims for services that were never provided and operating offices that weren’t properly licensed.

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