Pediatric Services of America Settles False Claims Act Allegations for $6.88 Million

Pediatric Services of America has agreed to pay nearly $7 million to settle claims it defrauded the government.
Image source: Wikimedia Commons

Under the False Claims Act, sins of omission[1. “Rise of the Reverse False Claim & Proposed Rules from CMS on Reporting & Returning Overpayments.” January 9, 2014. http://www.iadtc.org/news/152147/Rise-of-the-Reverse-False-Claim–Proposed-Rules-from-CMS-on-Reporting–Returning-Overpayments.html] are punished just as severely as sins of commission, and Pediatric Services of America can attest to this fact. Known as reverse false claims, failing to properly reimburse programs like Medicare and Medicaid for known overpayments is considered equivalent to overbilling and upcoding to maximize profits. Of course, accidents and negligent oversights will not fall within this category. However, if a healthcare provider is aware that it is receiving overpayment for services, it has a duty to return the extra funds within 60 days, or the False Claims Act could be triggered and the company held liable for up to $11,000 per violation – plus actual damages.

In today’s case,[2. “Pediatric Services of America, units to pay $6.88 million False Claims Act settlement.” August 3, 2015. http://www.bizjournals.com/atlanta/news/2015/08/03/pediatric-services-of-america-units-to-pay-6-88.html] we explore a recent reverse False Claims Act settlement between the government and Pediatric Services of America (PSA). The company provides “pediatric home care services for medically fragile children,” including private duty nursing, pediatric day treatment centers, and school health services.[3. PSA Healthcare Services, http://www.psahealthcare.com/our_services.html]

The case was commenced by an hourly, part-time billing specialist who noted that – almost as soon as she took the position – billing irregularities abounded within the PSA system. In exchange for her efforts, she will receive $1.1 million as a reward.

Details of the allegations against PSA

Under the Affordable Care Act, any healthcare provider receiving an overpayment via Medicaid must return those funds within 60 days. According to the allegations raised by the federal government and 17 states, PSA knowingly received overpayment for its home healthcare services and intentionally withheld the overpayments in violation of these rules.

The complainants alleged that PSA submitted claims for home healthcare visits that were not documented. More specifically, any child enrolled in PSA’s skilled nursing home visit program must receive a visit from a Registered Nurse (RN) at least monthly. Furthermore, PSA billed Medicaid for these RN visits without actually sending an RN to check on the child, which – if true as alleged – is a clear violation of the False Claims Act.

Lastly, PSA is alleged[4.

“Pediatric Services of America to Pay $6.7 Million to Settle False Claims Charges.” August 4th, 2015. http://www.corporatecrimereporter.com/news/200/pediatric-services-of-america-to-pay-6-7-million-to-settle-false-claims-charges/] to have exaggerated and inflated the length of time it spent caring for its patients. Presumably, this overstatement was implemented to maximize profits and unlawfully bilk the resource-strapped Medicaid system.

Pursuant to its investigation, federal authorities recovered significant “credit accounts” on PSA’s books, some of which had been sitting stagnant for years. However, the government noted that PSA made no attempt to rectify or investigate the reason for the credits, and it eventually absorbed the credits into its profits.

The whistleblower claims to have brought these issues to the attention of senior management on numerous occasions and was eventually fired from her position. The $6.8 million settlement resolves her wrongful termination lawsuit as well.

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If you work closely with healthcare billing and would like to discuss potentially suspicious behavior, please do not hesitate to contact Berger Montague right away.

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By | 2018-03-26T02:41:48+00:00 August 25th, 2015|Healthcare Fraud|