FLORIDA – Florida’s Lakeland Regional Medical Center has agreed to pay $4 million to settle common law allegations for impermissible Medicaid donations, the U.S. Department of Justice (DOJ) has announced.
According to the DOJ, Lakeland Regional Medical Center (LRMC) in Lakeland, Florida, has agreed to pay the United States $4 million to resolve allegations that it made donations to a local unit of government to improperly fund the state’s share of Medicaid payments to LRMC.
The United States alleged that, between October 2014 and September 2015, LRMC made improper, non-bona fide donations to Polk County, Florida, by assuming and paying certain of Polk County’s financial obligations to other healthcare providers. These donations were reportedly designed to increase Medicaid payments received by LRMC by freeing up funds for the county to make payments to the state as the state share of Medicaid payments to LRMC, the DOJ said.
This state share was “matched” by the federal government before being returned to LRMC as Medicaid payments. According to the DOJ, the Medicaid payments LRMC received were thus funded by the federal government and LRMC’s own donations, in violation of the prohibition on non-bona fide donations.
“When private parties make improper donations to fund the state share of Medicaid, they undermine a key safeguard for ensuring the integrity of the Medicaid program,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.
“Medicaid expenditures should be determined by beneficiaries’ medical needs rather than by donations by private hospitals to local units of government.”
“Protecting the Medicaid program is crucial, as millions of Floridians rely on it for their medical care and related services,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida.
“We are committed to ensuring that government funds are used for their intended purposes and are not improperly obtained.”
The DOJ said the resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the U.S. Department of Health and Human Services Office of Inspector General.
Fraud Section Attorneys Alison B. Rousseau and Jonathan T. Thrope, and Assistant U.S. Attorney Carolyn B. Tapie handled the matter.
The claims resolved by the settlement are allegations only, and there has been no determination of liability, the DOJ said.
The Florida Medicaid program provides medical assistance to low-income individuals and individuals with disabilities and is jointly funded by the federal and state governments. The DOJ said, under federal law, Florida’s share of Medicaid payments must consist of state or local government funds and may not come from “non-bona fide donations” from private healthcare providers, such as hospitals. A non-bona fide donation is a payment — in cash or in kind — from a private provider to a governmental entity that is then returned to the private provider through payment by Medicaid.
Because Medicaid services are reimbursed jointly by the federal and state governments, a non-bona fide donation causes federal expenditures to increase without any corresponding increase in state expenditures since the state share of the Medicaid payments to the provider comes from and is returned to the provider, the DOJ said.
According to the DOJ, the prohibition of this practice ensures that states are in fact paying a share of Medicaid payments and thus have the incentive to curb Medicaid costs and prevent unnecessary services.
