Maximus To Pay $42.7 Million for Role in Medicaid Fraud

Monday the Department of Justice (DOJ) and Maximus, Inc., both announced via press releases that the Reston-based government contractor had reached an agreement with the U.S. Attorney's Office in Washington D.C. and the Justice Department's Civil Division.

Maximus, Inc., is a well-known government service company that provides consulting and program management services. In this case, the company had a contract with the District of Columbia's Child & Family Services Agency (CFSA) as a reimbursement consulting firm for CFSA's foster care program. After investigation initiated by a whistle-blower's federal civil lawsuit against Maximus, Inc., it was determined that the company had caused CFSA to submit claims to Medicaid for foster child services that had not been provided.

The civil lawsuit was filed by a former Maximus, Inc., division manager under the False Claims Act. A review was conducted by the Department of Health and Human Services (HHS) Centers for Medicaid and Medicare Services that determined CFSA could not support 35 percent of its claims. As a result of that investigation, Maximus, Inc., paid $12.15 million, of which $4.93 million went to the whistle-blower.

The parties have now entered into a deferred prosecution agreement, a civil settlement, and a corporate integrity agreement to resolve the matter. Per the agreements, Maximus, Inc., admits responsibility for the actions of their employees, including a former company vice president, and will reimburse the government an additional $30.5 million. Further, the government will not file any criminal charges, but reserves the right to do so if Maximus, Inc., fails to comply with the agreements over the course of the next 24 months.

Richard Montoni is the CEO of Maximus. In the company's press release he said: "This settlement is in the best interests of the Company and its shareholders and resolves an investigation concerning work that dates back to 1999. MAXIMUS accepts responsibility for the conduct of its employees, and since that time, we have taken remedial actions to improve oversight to prevent a recurrence. It is imperative that our business achieves the highest standards, and over the last twelve months, we have actively worked to standardize procedures with the creation of a formal professional practices guide, the expansion of our compliance function, increased training programs, and rigorous quality reviews. MAXIMUS and its employees are committed to maintaining corporate integrity and client trust. We remain focused on the delivery of services in an environment that promotes and fosters leadership under the MAXIMUS Code of Business Conduct and Ethics."

Peter D. Keisler is an assistant attorney general for the Justice Department's Civil Division. In the DOJ's press release Keisler said: "The $42.65 million settlement with Maximus demonstrates the Justice Department's strong commitment to vigorously pursuing those companies that defraud the Medicaid program.

Department of HHS Inspector General Daniel Levinson said in the DOJ press release that the "corporate integrity agreement with Maximus reflects the commitment of the Office of Inspector General (OIG) to ensure that the Medicaid Program effectively serves vulnerable populations and is not exploited by consulting firms providing suspect reimbursement advice. This unprecedented corporate integrity agreement contains provisions that authorize OIG to review Maximus' contracts and requires dissemination of review findings to Maximus' clients."

U.S. Attonrey Jeffrey A. Taylor also commented for the press release, saying that this is the "latest in a series of cases showing that the U.S. Attorney's Office will aggressively investigate Medicaid fraud. This prosecution also underscores our office's commitment to ensuring that Medicaid contractors play by the rules. By the terms of today's agreement, Maximus acknowledged its responsibility for causing scarce Medicaid dollars to be spent for undocumented services that likely were never provided to some of the neediest citizens of the District of Columbia."

According to the company's press release, Maximus, Inc., headquartered in Reston, Va., employs more than 5,200 people in more than 220 offices in the United States, Canada and Australia.

Sources:

Press release, Virginia Company Enters into Deferred Prosecution Agreement
& Agrees to Pay $30.5 Million; http://www.usdoj.gov/opa/pr/2007/July/07_civ_535.html

Press release, MAXIMUS Settles District of Columbia Contract Investigation; http://phx.corporate-ir.net/phoenix.zhtml?c=88279&p=irol-newsArticle_PR&t=Regular&id=1029369&