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APS Healthcare Pays $13 Million to Settle Investigation into False Medicaid Claims

PRESS ADVISORY

APS Healthcare Pays $13 Million to Settle Investigation into False Medicaid Claims

February 22, 2011

Attorney General Sam Olens announced today that Innovative Resources Group, LLC, doing business as APS Healthcare Midwest, of White Plains, New York, has reached a $13 million settlement with the State of Georgia and the United States to resolve allegations under the False Claims Act. The State of Georgia’s share of the settlement is $7.8 million with the remaining $5.2 million representing the federal share of Georgia Medicaid expenditures. The government alleges that APS Healthcare submitted false claims to Medicaid through the Georgia Department of Community Health (DCH). Specifically, the claims allege that APS Healthcare did not provide specialty services related to disease management and case management to members of the Georgia Medicaid Management Program (GAMMP) during the period from September 1, 2007 through February 28, 2010.

Under the GAMMP contract, APS Healthcare agreed to provide case and disease management services to Georgia Medicaid recipients while APS Healthcare was paid a monthly fee for each member receiving such services. The government contends that APS Healthcare failed to provide the required services to a large portion of the Medicaid recipients and over-billed DCH in its monthly invoices.

“This substantial recovery of taxpayer dollars is attributable to the continued strong partnership between state and federal law enforcement agencies in the fight against healthcare fraud and abuse,” said Georgia Senior Assistant Attorney General Scott Smeal.“This case should send a strong message to companies such as APS Healthcare that they will be held fully accountable if they fail to provide the services they promised to provide to Medicaid patients.”

“The Department is committed to protecting the integrity of the Georgia Medicaid program, its members and the taxpayer dollars used to provide this much needed service,” said Robert Finlayson, Georgia Department of Community Health’s Inspector General. “We will remain vigilant in our efforts to identify any detected fraud, abuse or waste and aggressively recover all funds spent inappropriately.”

“In this time of tight budgets and rising healthcare costs, Georgia tried to improve its services to its Medicaid recipients by contracting with APS Healthcare. But, instead of providing improved efficiency, and effectiveness it billed for, APS Healthcare took Medicaid’s money for itself and left our must vulnerable citizens without aid,” said U.S. Attorney Sally Quillian Yates.

As part of the federal settlement, APS Healthcare has executed a Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG), which will require a robust compliance program. The CIA requires, among other things, intensive training and implementation of policies and procedures designed to ensure compliance with federal health care program requirements. In addition, APS Healthcare will be subject to external review of its compliance with state Medicaid contracts. If APS Healthcare fails to comply with certain material terms of the CIA, the company is subject to monetary penalties and exclusion from federal health care programs, including Medicare and Medicaid.

The civil settlement resolves a lawsuit filed under qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens to bring civil actions on behalf of the United States and share in any recovery. The case pending in the Northern District of Georgia, is captioned United States, ex rel. Michael Claeys, and State of Georgia ex. Rel Michael Claeys, v. United Healthcare, Inc., APS Healthcare Bethesda, Inc. and Innovative Resource Group, LLC d/b/a APS Healthcare Midwest, 1:09-cv-2779-WSD.

Senior Assistant Attorney General Scott A. Smeal led the State’s investigation, assisted by auditors and investigators with the Georgia Medicaid Fraud Control Unit. The investigation was conducted jointly with members of the United States Attorney’s Office, the Federal Bureau of Investigation and HHS-OIG.