MONTGOMERY—Dothan’s SpectraCare Health Systems agreed to pay $1 million to resolve a federal lawsuit alleging the organization overcharged Medicaid, announced Acting United States Attorney Sandra J. Stewart.
A notice of dismissal was filed Friday to resolve a qui tam lawsuit claiming the nonprofit violated the False Claims Act, although no liability was determined in the settlement agreement.
The government’s multiyear investigation, which spawned from a whistleblower complaint, sought to discover 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” actionable under a statute in the False Claims Act.
SpectraCare Health Systems, Inc. is a 501©(3) nonprofit organization headquartered in Dothan, which provides integrated healthcare services, including developmental disability services, intermediate care medical services, behavioral health services, and preventative programs to a range of patients. The company is contracted by the Alabama Department of Mental Health to provide 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 qui tam, or whistleblower, 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 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 will be paid to the Alabama Medicaid Agency.
The settlement resolves allegations that, from Oct. 1, 2012 through Dec. 31, 2019, SpectraCare (1) knowingly submitted to 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 (2) knowingly made, used, or caused to be made or used, false records or statements material to SpectraCare’s obligation to return overpayments to Medicaid based on such improper billing procedures, and/or (3) 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.