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Maxim Health Services, Inc. Agrees to Pay $150 Million in Medicaid Fraud Investigation

Rhode Island Medicaid Program to Receive $396,894

Attorney General Peter F. Kilmartin announced today that Rhode Island has reached a settlement with Maxim Healthcare Services, Inc. Maxim, a home health agency based in Baltimore, MD with a local address of 148 West River Street, Providence, provides in-home nursing and home health aide services to people with disabilities in forty-one states, including Rhode Island.

The settlement is the result of a federal and multi-state investigation that resulted in Maxim agreeing to pay a $20 million criminal fine and $130 million to resolve civil allegations under the U.S. False Claims Act. The settlement will return $396,894 to the state’s Medicaid program.

The settlement agreement resolves allegations that Maxim offices in forty-one states submitted claims for services not rendered, and that the company submitted claims that lacked required documentation. The settlement also resolves allegations that certain Maxim facilities were not properly licensed and were therefore ineligible under the Medicaid rules to submit claims for reimbursement.

“This is a classic case of a company defrauding the government and wasting taxpayer dollars,” said Attorney General Kilmartin. “Medicaid is one of the state’s greatest costs, and as such we need to ensure every dollar paid to a Medicaid provider is being properly spent on patient care and not lining the pockets of corporations.”

The investigation began with a whistleblower lawsuit filed in US District Court in New Jersey. The relator, who brought the suit on behalf of the government, is a New Jersey resident. The case began with allegations that a small number of false claims were filed on behalf of a single Medicaid recipient, and was subsequently developed by the government into a forty-one state settlement.

The settlement was led by a joint investigation by the United States Attorney’s Office for the District of New Jersey, the US Department of Justice and a State Team of representatives from the Medicaid Fraud Control Units of New Jersey, Virginia, Massachusetts and Ohio.

In addition to the civil settlement, Federal prosecutors have secured guilty pleas to criminal charges from nine Maxim employees, and the company has agreed to enter a deferred prosecution agreement. Maxim has also agreed to the terms of a Corporate Integrity Agreement (CIA) with the Office of the Inspector General of United States Department of Health and Human Services (HHS-OIG), and will hire a corporate monitor, at company expense, to ensure compliance with the terms of the CIA.

The total civil settlement is $130 million, with $121,514,199.08 designated as Medicaid program recovery. (Medicaid is a state administered healthcare program for the indigent and disabled which is funded jointly by the states and the federal government.) The remaining portion of the civil recovery is for damages to the Veteran’s Administration program.

The Attorney General’s Medicaid Fraud Control and Patient Abuse Unit enforces the laws pertaining to fraud in the state Medicaid program and prosecutes cases of abuse, neglect or mistreatment of patients in all state healthcare facilities. The Unit prosecutes criminal activity, pursues civil remedies where appropriate and participates with federal and state authorities in a variety of inter-agency investigations and administrative proceedings.

Since January, 2011, the Attorney General has recovered approximately $1.4 million on behalf of Rhode Island’s Medicaid program.

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