Six Health Centers Accused of Overbilling DOD for Over $100 Million

Six healthcare providers that contracted with the Department of Defense (DOD) intentionally overcharged the government by more than $100 million, according to allegations by the Department of Justice (DOJ). The DOJ announced a settlement with one of the implicated health plans, while pursuing claims against the remaining five.

The six healthcare plans, including The Johns Hopkins Medical Services Corporation and SVCMC Inc., formerly known as St. Vincent’s Catholic Medical Centers of New York, offer medical care to active and retired military personnel and their families through the Uniformed Services Family Health Plan. The DOJ has reached a $29 million settlement with SVCMC, while legal action is still pending against the other five providers.

According to the DOJ, SVCMC became aware in 2012 that the government had mistakenly classified its patients as sicker than they actually were, which led to increased reimbursement rates. Rather than alerting authorities to the overpayment, the DOJ claims SVCMC deliberately ignored the error. Moreover, the DOJ alleges that SVCMC reached out to the other five contractors, and together, they conspired to remain silent and continue billing at the inflated rates to secure higher reimbursements. The agency’s complaint asserts that, as a result, the government paid hundreds of millions of dollars in excessive payments to the healthcare providers.

The DOJ’s allegations include violations of the False Claims Act, unjust enrichment, breach of contract, and other related offenses. The case was initially litigated by former Principal Deputy Assistant Attorney General Brian Boynton.

“Those who receive public funds, including participants in government healthcare programs, must return funds to which they are not entitled,” stated Acting Assistant Attorney General Brett Shumate, head of the DOJ’s Civil Division, in a press release issued Friday.

The whistleblower complaint that led to these revelations was originally filed in 2016 under the qui tam provisions of the False Claims Act by Jane Rollinson, a former interim chief financial officer, and Daniel Gregorie, a former consultant to the CEO of an SVCMC-affiliated clinic in Maine, Martin’s Point Health Care.

As part of the settlement with SVCMC, Rollinson and Gregorie will receive nearly $5.7 million, according to the DOJ.

The case was handled by the whistleblower law firm Phillips & Cohen. Emily Stabile, a partner and whistleblower attorney at the firm, praised her clients for their actions. “Ms. Rollinson and Dr. Gregorie thought it was important that DOD healthcare funds were used for healthcare for military families in accordance with the rules,” she said. “We are proud to represent Ms. Rollinson and Dr. Gregorie, who had the courage to speak up about this important matter.”

By fLEXI tEAM