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HomeHealth LawNot-So-Charitable Donations: DOJ Achieves a $20 Million Settlement for a Backdoor Donation...

Not-So-Charitable Donations: DOJ Achieves a $20 Million Settlement for a Backdoor Donation Scheme for Elevated Medicaid Contributions

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On April 6, 2022, BayCare Well being System Inc. (BayCare) entered right into a $20 million settlement beneath the False Claims Act with the U.S. Division of Justice (DOJ) to resolve allegations that it had made donations to be able to improperly inflate the funding 4 of its hospitals obtained from the federal Medicaid program. In keeping with the settlement, BayCare didn’t formally admit wrongdoing or legal responsibility; relatively, BayCare settled to be able to “keep away from the delay, uncertainty, and expense of litigation.”

Florida Medicaid is run by the state however collectively funded by each the state and federal governments. The federal authorities’s Federal Monetary Participation (FFP) share is paid in accordance with statements of expenditures submitted by the state and per the system described in sections 1903 and 1905(b) of the Medicaid Act. As soon as state funding obligations are met, matching federal funding is triggered.

Historically excluded from state expenditures are provider-related donations, outlined as donations or voluntary funds made immediately or not directly to the state by or on behalf of a healthcare supplier for administration of the state’s Medicaid plan. Nonetheless, “bona fide” donations, or donations made to the state by a supplier that has no direct or oblique relationship to Medicaid funds made to healthcare suppliers, will depend towards complete state expenditures. This has resulted in preparations the place well being care suppliers will make bona-fide provider-related donations to the state that seemingly haven’t any relationship to Medicaid funds, however with the specific or implied understanding that such funds will probably be used for the needs of fulfilling state Medicaid contribution obligations. This could considerably enhance federal Medicaid matching funds to the state at no precise price to the state or native governments concerned.

In 2016, Larry Bomar, a former hospital reimbursement supervisor in Florida filed a whistleblower swimsuit alleging that, between October 2013 and September 2015, BayCare had allegedly made improper money donations to the Juvenile Welfare Board (JWB) as a part of a scheme to spice up BayCare’s Medicaid funding. In keeping with the relator, BayCare knowingly made these sham donations to JWB, which on the floor had no direct or oblique relationship to Medicaid funding. Nonetheless, pursuant to a backdoor settlement, JWB then transferred all however 10% of these donations to the Florida Company for Healthcare Administration (AHCA) to be counted towards state Medicaid contributions. These state contributions then triggered matching federal funding contributions. As a result of these state contributions have been matched by the federal authorities after which a portion have been allegedly routed to BayCare hospitals within the type of Medicaid funds, BayCare purportedly was capable of recoup its unique donations to JWB from the state along with matching federal funding. In consequence, it was alleged that dBayCare knowingly brought on false claims for federal Medicaid funding as a result of its donations elevated Medicaid funds obtained by the state and by BayCare with none precise state contributions. In impact, BayCare “paid themselves to extend federal matching funding on Medicaid sufferers, and paid the JWB a ten p.c payment to be able to accomplish the scheme.”

This settlement comes lower than two months after a $5.5 million settlement reached by Florida-based NCH Healthcare System for equally making non-bona fide donations as a part of its personal scheme to spice up its Medicaid funding. Mixed, these settlements spotlight the federal government’s emphasis on combatting healthcare fraud and counsel that the federal government is holding a watchful eye on Medicaid contributions.

 

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