Former Chief Operating Officer of Freedom Health to Pay $32.5 Million to Settle False Claims Act Allegations
As has been the case all too often, the government is again alleging that another health care provider has given more importance to monetary considerations than it has over medical necessity when it comes to patient care. Indeed, late last week, the Justice Department announced that former Chief Operating Officer (COO) of Freedom Health, Siddhartha Pagidipati, has agreed to pay $750,000 to resolve False Claims Act violations. Freedom Health – a Florida-based provider of managed care serves – has agreed to pay more than $31 million for its part in engaging in illegal schemes to maximize its payment from the government in connection with Medicare Advantage plans.
“When entering into agreements with managed care providers, the government requests information from those providers to ensure that patients are afforded the appropriate level of care,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Today’s result sends a clear message to the managed care industry that the United States will hold managed care plan providers responsible when they fail to provide truthful information.” The government alleged that Freedom Health submitted unsupported diagnosis codes to The Centers for Medicare & Medicaid Services (CMS) which resulted in inflated reimbursement rates related to two Medicare Advantage plans operating in Florida. Moreover, the government also alleged that Freedom Health misrepresented to CMS the scope of its network of providers in its application to the provider. These representations allegedly began to occur in 2008 and were later expanded in 2009 into new Florida counties and in other states.
“Medicare Advantage insurers must play by the rules and provide Medicare with accurate information about their provider networks and their patients’ health,” said Chief Counsel to the Inspector General Gregory Demske of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “OIG will investigate and hold managed care organizations accountable for fraud. Moving forward, the innovative CIA reduces the risks to patients and taxpayers by focusing on compliance issues unique to Medicare Advantage plans.” The original case that lead to these settlements was brought about by a lawsuit under the qui tam or whistleblower, provisions of the Federal False Claims Act and the Florida False Claims Act. The qui tam provisions of this Act permits private individuals to sue on behalf of the government in cases involving false claims and to share in any subsequent recovery. The whistleblower in this case is former Freedom Health employee Darren D. Sewell. His share of the settlement has not yet been determined.
Optimum HealthCare Inc., America’s 1st Choice Holdings of Florida LLC, Liberty Acquisition Group LLC, Health Management Services of USA LLC, Global TPA LLC, America’s 1st Choice Holdings of North Carolina LLC, America’s 1st Choice Holdings of South Carolina LLC, America’s 1st Choice Insurance Company of North Carolina Inc. and America’s 1st Choice Health Plans Inc., are all corporate entities of Freedom Health and as a result were a part of the settlement. If you have been accused of violating The False Claims Act it is advised that you contact a False Claims Act lawyer. A qui tam law firm will be able to advise you on such matters and protect your rights. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
