KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Feds Use Doctrine To Pursue Federal Food and Drug Law Violations

Use of the "responsible corporate officer doctrine" allows federal officials to hold health care executives personally and criminally responsible for corporate violations. Meanwhile, in other news related to health care fraud and abuse, a number of states have reached settlements with firms accused of defrauding the Medicaid program.

The Wall Street Journal: U.S. Targets Drug Executives
U.S. authorities are stepping up enforcement of a little-used law — the so-called "responsible corporate officer doctrine" — to hold executives personally and criminally responsible for corporate violations of U.S. food and drug laws. The development has triggered a new wave of worry among defense lawyers representing health care executives (O’Connell and Rothfeld, 9/13).

The Baltimore Sun: Columbia Firm Settles $150M Fraud Case With Federal Government
A Columbia-based health care firm has agreed to a $150 million settlement with the federal government and 43 states to resolve criminal and civil charges that it submitted claims for millions of dollars of work that it did not perform and operated offices that were not properly licensed, officials said Monday. A five-year federal investigation found that Maxim Healthcare Services Inc., one of the country's largest providers of home health care services, submitted $61 million in false claims for services to the federal government's Medicaid and Veterans Affairs health programs over an 11-year period from 1998 to 2009 (Walker, 9/12).

Propublica: Troubled Health Care Staffing Chain Settles With Government For $150 Million
One of the nation's largest health care staffing companies has agreed to pay $150 million to settle sweeping criminal and civil fraud allegations of submitting false bills to federal and state health programs. Maxim Healthcare Services, Inc. was accused of submitting more than $61 million in fraudulent billings to government health programs for services that were either not provided or not eligible for reimbursement, according to a press release Monday from the U.S. Department of Justice (Ornstein and Weber, 9/12).

The Associated Press/Houston Chronicle: Maryland Co. To Pay $150M In Health Fraud Probe
A Maryland-based health care company accused of defrauding Medicaid and other federal programs will pay $150 million in a settlement announced Monday. Maxim Healthcare Systems is a health care staffing agency based in Columbia, Md., with offices in more than 40 states. Under the agreement with federal prosecutors announced Monday, Maxim will pay a criminal penalty of $20 million and civil penalties totaling approximately $130 million to Medicaid programs and the Veterans Affairs program (Porter, 9/12).

The Associated Press/Houston Chronicle: Neb. A.G. Announces Health Care Company Settlement
Nebraska Attorney General Jon Bruning has announced a settlement with a health care company that will return more than $275,000 to the state's Medicaid program. The settlement resolves allegations that Maxim Healthcare Services, Inc., submitted claimed for services not rendered and without required documentation. It also resolves claims that certain Maxim facilities were not properly licensed and ineligible to submit Medicaid reimbursement claims (9/12).

The Associated Press/Houston Chronicle: Fraud Probe Off; Ohio Valley Hospitals Fined $3.8M
Ohio Valley Medical Center, East Ohio Regional Hospital and the parent corporation of both will pay $3.8 million to settle allegations of health care fraud, U.S. Attorney William Ihlenfeld said Monday. The deal ends an investigation into allegations that the hospitals submitted false claims to Medicaid and Medicare from January 2005 to August 2010. Both hospitals are owned by Ohio Valley Health Education & Services Corporation. OVMC is in Wheeling, and East Ohio is in Martins Ferry, Ohio (Smith, 9/12).

CNN: Are Medicare And Medicaid 'Paid To Crooks'
The federal government estimates that in 2010, about 5.5 percent of its spending — about $125 billion — involved "improper payments" to businesses or individuals. About $70 billion came from Medicare, the federal health program for seniors, and Medicaid, which provides medical insurance for low-income Americans. Those programs involve more than $660 billion. But "improper payments" is a broad category that not only includes fraud, but administrative errors and overpayments. The low end of [Newt] Gingrich's claim of Medicare and Medicaid fraud losses is roughly what the federal government has reported for erroneous payments — but since the figure includes ordinary clerical mistakes, the former speaker's estimate likely overstates the actual amount lost to "crooks," (9/13).

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.