Maximus settles Medicaid complaint

The Reston-based Maximus consulting company agreed yesterday to pay $30.5 million to resolve a criminal investigation into whether it falsified tens of millions of dollars in Medicaid claims prepared for the D.C. government.

The overall settlement, announced by the Justice Department, also includes more than $12 million that federal authorities said they recovered from the D.C. government in connection with the investigation.

Daniel R. Levinson, inspector general for the U.S. Department of Health and Human Services, said the agreement helps ensure that Medicaid “is not exploited by consulting firms providing suspect reimbursement advice.”

Jeffrey A. Taylor, U.S. attorney for the District, said Maximus admitted its responsibility for causing “scarce Medicaid dollars to be spent for undocumented services that likely were never provided to some of the neediest residents of the District of Columbia.”

The Washington Times reported last year that federal authorities were conducting a criminal investigation into Maximus after former company manager Benjamin Turner filed a False Claims Act lawsuit.

Mr. Turner’s complaint, filed in Alexandria federal court by attorney Candace McCall, stated that the company overcharged Medicaid in connection with consulting services it provided to the D.C. Child and Family Services Agency.

The District hired Maximus, one of the country’s largest government consulting companies, to help recoup Medicaid funds for services that the agency provided to foster children.

However, Mr. Turner’s lawsuit charged the company’s work was “grounded in fraud.”

“After obtaining confirmation that such services were not performed through an [agency] computer search, and in the majority of instances after contacting the social workers who confirmed the services were not performed, Maximus nevertheless created files that indicated services were performed and used such information to demand Medicaid pay for services not rendered,” the lawsuit states.

Medicaid is a health-insurance program for low-income peoplepaid for jointly by the federal and state governments. To bill Medicaid, providers are supposed to have extensive proof that services were provided.

But when Maximus began working for the city's foster care agency, many city documents were incomplete or missing, according to court records. So the company “created billing documents,” according to Mr. Turner’s complaint.

“Maximus would create an invoice for that beneficiary, as if services were performed, when there was no record of services having been performed,” the lawsuit stated. Among Maximus company employees, the process was dubbed “Operation Lightning Rod,” according to the suit.

Mr. Turner will receive $4.93 million as his share of the settlement.

Chief Executive Officer Richard Montoni said, “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.”

Maximus officials said the company would likely post a loss in the third quarter because of the settlement. The company also is exploring “strategic alternatives,” including a possible sale of the company.

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