The Louisiana Department of Health has agreed to resolve allegations that it submitted false and inflated Medicaid claims for long-term nursing home and hospice care, the Department of Justice announced today. Under the settlement agreement, the state agency has agreed to pay $13,422,550.

“Today’s settlement demonstrates that we will take whatever steps are appropriate in our effort to protect federal healthcare programs, including Medicaid, from false claims,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “Anyone who seeks to profit at the expense of Federal taxpayers, including state agencies, will face appropriate consequences.”

“This office will remain vigilant in its efforts to ensure the integrity of the Medicaid program by continuing to pursue those who commit improprieties against the program – whether they be providers or beneficiaries, or those more central to the administration of the program,” said Brandon J. Fremin, the U.S. Attorney for the Middle District of Louisiana. “The people of Louisiana deserve it. I am grateful to the dedicated AUSAs and staff in our Civil Division and to the Office of Inspector General for the U.S. Department of Health and Human Services for their hard work and dedication to this very important matter.”

Medicaid is a joint federal and state program providing financial assistance to individuals with low incomes to enable them to receive medical care. The Medicaid program makes quarterly grant awards to each participating state covering an amount, commonly known as the federal share, of the state’s expenditures for healthcare services covered by the state’s Medicaid plan. The federal share is determined by a percentage rate that is subject to change from quarter to quarter. Nursing homes and hospices typically submitted claims to Louisiana on the tenth day of the month following the month during which the services were actually provided. Louisiana then paid these claims, sought Federal reimbursement for those expenditures, and received Federal reimbursement based on the rate in effect at that time.

The United States alleged that the Louisiana Department of Health knew that the rates determining the federal share of Louisiana’s Medicaid payments were set to decrease following the months of December 2010, March 2011, June 2011, and September 2013. To receive the higher Federal share percentage rates in effect during these months, the Louisiana Department of Health fraudulently caused its healthcare contractor, Molina Medical Solutions, to prepare, submit, and pay claims for nursing home and hospice services in these months, before the providers had submitted to Louisiana any claims for them. Louisiana then claimed Federal reimbursement for those premature payments. As a result, the Louisiana Department of Health received a Federal share based upon the higher percentage rate in effect in those months, rather than the lower percentage rate in effect the following months when the providers actually submitted their claims to Louisiana.

This settlement was the result of an investigation by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Middle District of Louisiana, and the U.S. Department of Health and Human Services Office of Inspector General.

The claims resolved by this settlement are allegations only, and there has been no determination of liability.