- The Washington Times - Sunday, May 13, 2007

Executives for the Reston-based Maximus consulting company say they are hoping soon to resolve a criminal investigation by the Justice Department into the firm’s work preparing Medicaid claims for the D.C. government.

Richard A. Montoni, the company’s chief executive officer, said Maximus may come to a “negotiated resolve” of the more-than-two-year-long investigation into whether it submitted false Medicaid claims on behalf of the District.

“We continue working to resolve the D.C. matter,” Mr. Montoni told analysts during a quarterly earnings conference call last week.

In addition, Maximus said in a Securities and Exchange Commission filing last week the company is negotiating with the criminal and civil divisions of the Justice Department.

“Attorneys from the criminal division have expressed their view that the company either willfully or recklessly submitted inaccurate claims to the federal government on behalf of the District of Columbia,” the filing states.

The company’s previous SEC filing, in February, said Maximus “disputes that view,” though the latest filing includes no statements from the company disputing the views of the Justice Department.

The Washington Times first reported last year the company came under criminal investigation after a former employee filed a False Claims Act lawsuit against Maximus in federal court in Alexandria. The suit accused the company of submitting tens of millions of dollars in questionable Medicaid claims for the District’s foster care agency.

Unsealed court filings show the former Maximus employee estimated the questionable claims totaled roughly $33 million, which means a settlement could range in the tens of millions of dollars.

Maximus was hired under an arrangement in which it got a percentage of all Medicaid claims it successfully processed for the District. The company was hired to help the city get federal reimbursement for care the District provided to foster children.

Medicaid covers health cost for the poor and is funded jointly by the federal government and the states.

The former employee’s False Claims Act lawsuit was dismissed from Alexandria and moved at the request of the Justice Department to the District, where proceedings remain under seal, according to unsealed filings in Alexandria federal court.

Failing to resolve the investigation could have serious consequences for the Maximus.

“If we are unable to resolve this matter, the company could be subject to criminal prosecution and suspension or debarment from performing government contracts,” the company also noted in its latest SEC filing.

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