NEWARK, N.J. — Maxim Healthcare Systems, accused of defrauding Medicaid and other federal programs, will pay $150 million in a settlement announced Monday.
Colorado will receive $5.7 million in the settlement, with the payment going to the general fund, according to the attorney general’s Medicaid Fraud Control Unit.
Maxim is a health care staffing agency based in Columbia, Md., with offices in more than 40 states. Under the agreement with federal prosecutors, it will pay a criminal penalty of $20 million and civil penalties totaling approximately $130 million to Medicaid programs and the Veterans Affairs program.
About $70 million will go to the federal government and $60 million will go to 42 states where false claims were made. Tony West, assistant attorney general of the Justice Department’s civil division, said it was the largest civil settlement in a home-health-care fraud case.
“Health care fraud costs taxpayers money; in this case, a lot of money,” West said. “This is not acceptable because each of us ends up footing the bill in higher health care costs.”
Authorities had investigated the company for the past five years and charged it with conspiracy to commit health care fraud for submitting claims for services that were never provided and operating offices that weren’t properly licensed.
“We take full responsibility for these events, . . . and we are pleased to reach a settlement that will allow us to move forward with the important work of caring for our patients and clients who depend on us each and every day,” Maxim chief executive Brad Bennett said in a statement Monday.
Nine Maxim employees — including three regional account managers, a supervising nurse and a home health aide — have pleaded guilty to either health care fraud or making false statements since December 2009 and face maximum prison sentences of between five and 10 years.
Reached at home Monday, 63-year-old Richard West, diagnosed with muscular dystrophy in 1981, directed inquiries to a website that describes his involvement in the case.
According to West’s account on the website, he learned that his Medicaid home-health-care services would be reduced or suspended because he had exceeded his monthly limit. When he consulted a log he had kept of his home care, he realized the accounting was incorrect. He eventually contacted authorities, who concluded that Maxim had billed Medicaid for 735 hours of service that was never provided.
