BOSTON, Dec. 15 2004 – LAWFUEL – First for law news — Massachusetts …

BOSTON, Dec. 15 2004 – LAWFUEL – First for law news — Massachusetts Attorney General Tom Reilly and United States Attorney Michael J. Sullivan announced today that COLUMBIA HOSPITAL CORPORATION (“Columbia”) of Massachusetts has paid $960,000 to resolve civil claims that it fraudulently overbilled the state’s Medicaid
program by exaggerating the disability levels of dozens of their
developmentally disabled clients between 1996 and 1999. As a result of the
settlement, the United States Government and the Commonwealth of Massachusetts
will each receive $400,000 for reimbursement to the federal and state Medicaid
programs respectively. The remaining $160,000 will go to the whistleblower
who triggered the investigation.

“The U.S. Attorney’s Office is committed to using every legal tool at our
disposal to assure the protection of the resources of the Medicare Trust Fund,
state Medicaid programs, and other government health programs,” stated U.S.
Attorney Sullivan. “We will hold accountable all companies and individuals
that steal from taxpayers.”

“With today’s spiraling costs, we must make sure that every health care
dollar is going where it should,” Attorney General Reilly said. “Companies
cannot be allowed to manipulate the Medicaid system to cheat taxpayers and
gain an unfair advantage over other businesses.”

In 1998, Attorney General Reilly’s Medicaid Fraud Control Unit began an
investigation into allegations that COLUMBIA’s MetroWest Day Habilitation
Program in Ashland had exaggerated the disability levels of dozens of their
developmentally disabled clients, which then resulted in higher state Medicaid
payments. Investigators reviewed hundreds of records of MetroWest’s clients,
and engaged expert consultants to establish the extent of disability of the
affected persons. Present and former employees were interviewed and thousands
of pages of personnel records and treatment files were obtained and analyzed.

Medicaid rules require that each client is evaluated by the program based
on 16 different disabling conditions such as impaired vision, hearing or
mobility. For example, MetroWest would allegedly evaluate a client suffering
from severe handicaps when actually the evaluation showed only a moderate
level of disability. As a result, the daily rate paid for that client by
Medicaid was inflated from $57.20 to $77.64, resulting in a $20.44 overpayment
for each day of treatment.

In 1999, Tenet MetroWest HealthCare Limited Partnership (“Tenet”)
purchased the program from COLUMBIA, and after learning of the investigation,
Tenet voluntarily cooperated. Tenet agreed to revamp its procedures and bring
the program into compliance with the Medicaid regulations. Tenet settled with
the Attorney General Reilly’s Office and returned $92,254 to the state
Medicaid program to compensate for the higher reimbursement it had received
before it revised the disability levels.

The investigation was triggered by information supplied by a former
employee of the day habilitation program, who later filed whistleblower
lawsuits in federal and state court. As a result of today’s settlement, the
whistleblower will receive $160,000.

The settlement was handled for Massachusetts by Assistant Attorney General
Peter Clark, of Attorney General Reilly’s Medicaid Fraud Control Unit, and was
investigated by Medicaid Fraud Control Unit’s Catherine Fielding and John
Curley with assistance from the Federal Bureau of Investigation. The federal
government was represented by Assistant U.S. Attorney Roberta Brown of U.S.
Attorney Sullivan’s Civil Division and Trial Attorney Justin Dracut of the
Civil Frauds Branch of the Department of Justice.

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