Maxim Healthcare Services Inc., a prominent national provider of home healthcare, has reached a settlement with the U.S. Department of Justice, resolving criminal and civil charges stemming from a widespread scheme to defraud Medicaid and Veterans Affairs programs. The settlement, totaling approximately $150 million, addresses fraudulent activities that amounted to over $61 million in false billings.
The announcement was made jointly by high-ranking officials from the Department of Justice, including Assistant Attorney General Tony West, and U.S. Attorney for the District of New Jersey, J. Gilmore Childers, alongside representatives from the Health and Human Services Office of Inspector General (HHS-OIG), the FBI, and the VA Office of Inspector General (VA OIG).
Maxim Healthcare Services was formally charged with conspiracy to commit healthcare fraud and entered into a Deferred Prosecution Agreement (DPA). This agreement allows Maxim to avoid a conviction if they adhere to the stringent requirements of the DPA over a 24-month period. As part of the DPA, Maxim has agreed to pay a $20 million criminal penalty and approximately $130 million in civil settlements to resolve False Claims Act allegations.
This case has already seen nine individuals, including eight former Maxim employees and a parent of a former patient, plead guilty to felony charges. These charges are related to the submission of fraudulent claims, creation of false documentation, and misleading statements to government health program officials concerning Maxim’s practices.
The Nationwide Fraud Scheme Unveiled
The criminal complaint against Maxim Healthcare Services details a systematic practice of submitting fraudulent billings to government healthcare programs. This scheme, which reportedly took place from 2003 to 2009, involved billing for services that were either not rendered or were not eligible for reimbursement under program rules. During this period, Maxim received over $2 billion in reimbursements from government healthcare programs across 43 states, highlighting the scale of their operations and the potential impact of the fraud.
Assistant Attorney General West emphasized the severity of such actions: “Fraudulent billing for services not rendered uses patients as pawns in a game of corporate greed that puts cash over care and wastes precious taxpayer dollars.” He further noted the importance of these settlements in recovering misused funds and ensuring resources are available for crucial healthcare programs.
Acting U.S. Attorney Childers echoed this sentiment, stating, “Maxim, including senior executives, defrauded a system providing needed services to turn money meant for patient care into corporate profits.” He expressed hope that Maxim’s corrective actions would serve as a benchmark for ethical practices within the healthcare industry.
Details of the Fraudulent Activities
The investigation revealed several methods employed by Maxim Healthcare Services to execute the fraud:
- Billing for Unrendered Services: Employees created or altered timesheets to bill government programs for services that were never actually provided to patients.
- Unlicensed Operations: Services were billed through licensed offices while being supervised by unlicensed offices, deliberately concealed from auditors and investigators.
- Falsified Documentation: Documents related to essential administrative functions, such as caregiver training and qualifications, were fabricated or modified to support fraudulent billings.
These actions allowed Maxim Healthcare Services to systematically inflate their claims and illegally obtain funds from programs designed to support vulnerable populations.
Individuals Held Accountable
The investigation and subsequent legal actions have led to guilty pleas from several individuals involved in the scheme, demonstrating the multi-faceted nature of the fraud and the levels of responsibility within Maxim Healthcare Services. These individuals include:
- Gregory Munzel: A regional account manager who admitted to awareness of false time card submissions and forging caregiver credentials under pressure from superiors.
- Bryan Lee Shipman: Another regional account manager who acknowledged the operation of an unlicensed office in Gainesville, Georgia, and the direction to bill through a licensed office to deceive Medicaid.
- Matthew Skaggs: A regional account manager who made false statements to a Texas Medicaid surveyor investigating an unlicensed Maxim office in Houston.
- Andrew Sabbaghzadeh and Jason Bouche: Account manager and recruiter respectively, who confessed to creating fraudulent time cards and even using cut-and-pasted signatures to submit false claims.
- Donna Ocansey: A Director of Clinical Services who fabricated documentation to falsely show that mandatory supervisory visits were conducted, citing pressure from superiors and inadequate resources.
- Mary Shelly Janvier-Pierre and Sandy Cave: A licensed practical nurse and a patient’s mother who colluded to bill Medicaid for services not rendered, splitting the fraudulent payments.
- Marion Morton: A home health aide who fabricated timecards at the instruction of Maxim employees, leading to bills submitted for over 24 hours of work in a single day.
These cases underscore the pervasive nature of the fraudulent practices within Maxim Healthcare Services and the accountability being pursued at various levels of the organization.
Maxim Healthcare Services’ Remedial Actions and Compliance
The Department of Justice’s decision to offer a DPA to Maxim Healthcare Services reflects the company’s cooperation and the significant remedial actions undertaken, particularly starting in May 2009. These actions include:
- Personnel Changes: Termination of senior executives and employees identified as responsible for the misconduct.
- New Leadership: Establishment of key leadership positions such as CEO, Chief Compliance Officer, and Chief Quality Officer, filled with new personnel.
- Disclosure and Cooperation: Identification and disclosure of former employee misconduct to law enforcement, providing critical information for prosecutions.
- Enhanced Compliance Program: Significant increase in resources allocated to corporate compliance programs.
Under the DPA, Maxim Healthcare Services is obligated to continue cooperating with ongoing investigations, implement a robust corporate compliance and governance program, and accept full responsibility for the conduct that led to the government’s investigation.
Furthermore, a corporate integrity agreement with HHS-OIG mandates additional reforms and monitoring. Maxim is also required to retain an independent monitor, selected by the U.S. Attorney’s Office, to oversee business operations and ensure compliance with healthcare laws and regulations.
Whistleblower Contribution and HEAT Initiative
The settlement originated from a False Claims Act lawsuit, enabled by whistleblower provisions that allow private citizens to report fraud and share in recoveries. The whistleblower in this case will receive approximately $15.4 million for bringing the fraudulent activities to light.
This case is also part of the broader Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, launched in 2009 to combat healthcare fraud. This initiative highlights the partnership between the Department of Justice and the Department of Health and Human Services in aggressively pursuing and preventing Medicare and Medicaid fraud. The False Claims Act remains a vital tool, with over $5.9 billion recovered in healthcare fraud cases since January 2009 and over $7.5 billion in total recoveries.
The Maxim Healthcare Services settlement serves as a stark reminder of the government’s commitment to combating healthcare fraud and ensuring that companies providing essential services operate with integrity and prioritize patient care over profit.
