Maxim Healthcare Services Agrees to pay $150 Million and Enact Reforms after Being Charged with Healthcare Fraud

On September 12, 2011, the Department of Justice revealed that Maxim Healthcare Services, Inc., one of the nation’s leading providers of home healthcare services, has entered into a settlement to resolve criminal and civil charges involving a nationwide scheme to defraud Medicaid programs and the Veterans Affairs programs of more than 60 million dollars.  The multi-state investigation included the New Jersey Attorney General’s Office through its Medicaid Fraud Control Unit, the US Attorney’s Office, the US Department of Justice, the FBI, the US Department of Health and Human Services and the US Department of Veterans Affairs. 

Maxim was charged in a criminal complaint with conspiracy to commit healthcare fraud and has entered into a deferred prosecution agreement (DPA) with the Department of Justice.  The company has agreed to pay a criminal penalty of $20 million.  Additionally, to date, 9 individuals have pleaded guilty to related felony charges.  The civil charges, brought against the company through the False Claims Act, accuse Maxim of false home healthcare billings to Medicaid and the Department of Veterans Affairs.  The settlement, which requires the company to pay about $130 million, resolves allegations that Maxim billed for services that were not rendered, not properly documented, and performed in unlicensed offices.  The settlement also includes a corporate integrity agreement with Health and Human Services Office of Inspector General (“HHS-OIG”), which requires reforms and monitoring under HHS-OIG supervision.  Finally, the company is required to retain and pay an independent monitor to review Maxim’s business operations and regularly report on the company’s compliance with all federal and state healthcare laws.

This qui tam case was brought to the attention of the United States government by a whistleblower who was a Medicaid patient.  Richard West, who was receiving home nursing services through Maxim, was informed that his benefits had exceeded the limits of his healthcare coverage because of all of the services Maxim had supposedly provided him.  Since he had not received these treatments and had detailed records, he was able to figure out that Maxim had claimed more than 700 hours of services that were not provided to him over the course of a 15 month period.  West will receive approximately $15.4 million as his share of the recoveries from the federal government and the states.

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