Md. Health Care Co. Maxim Settles DOJ Fraud Probe

Maxim Health Care Services has agreed to pay $150 million to resolve fraud allegations by the Justice Department and the attorneys general of 42 states. The home health care company admitted to overcharging Medicaid for six years. Eight former employees at the company have pleaded guilty in connection with the scheme, and some of them face prison time.

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A home health care company is paying $150 million to resolve fraud allegations by the Justice Department and attorneys general of more than 40 states. Maxim Health Care Services admitted to overcharging Medicaid, the government health program for the poor, as a matter of course for six years. Eight former employees have pleaded in connection with the scheme, and some of them face prison time. NPR's Carrie Johnson has more.

CARRIE JOHNSON: Problems for Maxim, a home health care business based in Columbia, Maryland, started in 2004. That's when a New Jersey man with muscular dystrophy got a notice that he was about to exceed the limit on his insurance benefits. He realized Maxim had billed Medicaid for hundreds of hours of nursing care he never received. He blew the whistle and that single case eventually led investigators to others all over the country.

Tony West leads the civil division at the U.S. Justice Department.

TONY WEST: Here you had a fairly extensive overbilling scheme, billing for services that were not rendered and then an effort by Maxim's former officers and employees to conceal the company's fraud. Essentially it was a game of corporate greed that put cash over care.

JOHNSON: Federal and state prosecutors spent more than five years on the investigation, interviewing witnesses and digging through almost one thousand boxes of company timecards.

Gil Childers is a federal prosecutor in New Jersey who helped negotiate the settlement. He says Maxim made some big changes along the way.

GIL CHILDERS: The entire top level, top tier of management in the company has been replaced.

JOHNSON: Childers says eight former Maxim workers have quietly pleaded guilty to felony fraud or false statements charges. Prosecutors agreed not to charge the company itself with a crime if it stays out of trouble for the next couple of years. Again, Childers.

CHILDERS: Maxim is one of the largest home health care providers in the country. It employs over 88,000 people nationwide. Very few of those people were involved in any sort of fraudulent conduct. And a deferred prosecution arrangement allows the company to continue to move forward, to continue to operate, to continue to provide services.

JOHNSON: A spokeswoman for Maxim wouldn't be interviewed on tape. In a written statement, she says the company, which collected two billion dollars in government reimbursements over the course of the fraud, takes full responsibility for the overcharges. Maxim says it will keep on cooperating with the government as the investigation continues.

Carrie Johnson, NPR News, Washington.

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