SpectraCare Health Systems to pay $1 million dollars to resolve false claims act allegations

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MONTGOMERY, Ala. (WDHN) — SpectraCare Health Systems, Inc., headquartered in Dothan, Alabama, agreed to pay $1 million dollars to resolve a federal lawsuit alleging that it violated the False Claims Act, announced Acting United States Attorney Sandra J. Stewart.

The Government’s multi-year investigation, which spawned from a whistleblower complaint, investigated whether SpectraCare knowingly violated the False Claims Act by improperly billing Alabama Medicaid for Basic Living Skills services, and by failing to return overpayments to the Alabama Medicaid Agency, which constitutes a “reverse false claim” under the False Claims Act.

SpectraCare Health Systems is a non-profit organization which provides integrated healthcare services, including developmental disability services, intermediate care medical services, behavioral health services, and preventative programs.

The company is contracted by the Alabama Department of Mental Health to provide these services, which are paid for by the Alabama Medicaid Agency.

This lawsuit was initially filed in the United States District Court for the Middle District of Alabama by a former SpectraCare employee under the provisions of the False Claims Act. Pursuant to these provisions, a private citizen can bring suit on behalf of the United States and share in any recovery. 

The United States will receive $743,193.00 of the $1 million dollar settlement, 19% of which will go to the relator as her share of the Government’s recovery in the matter. The remaining $256,807.00 will be paid to the Alabama Medicaid Agency.

The settlement resolves allegations from October 1, 2012 through December 31, 2019, that SpectraCare knowingly submitted Medicaid claims for reimbursement for services that were billed without complete and correct documentation, billed in duplicate, over-billed, or otherwise improperly billed, and/or knowingly made, used, or caused false records or statement material to SpectraCare’s obligation to return overpayments to Medicaid based on such improper billing procedures, and/or knowingly, intentionally, or recklessly failed to repay, or to exercise reasonable diligence to determine whether it was obligated to repay, Medicaid for SpectraCare’s improper claim submissions and their attendant overpayments.

The case was investigated in conjunction with the Office of Inspector General for the United States Department of Health and Human Services.  The claims resolved by the settlement are allegations only, and there has been no determination of liability.

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