Ohio AG: Settlement Reached with Firm in $26M Medicaid Fraud Case

Ohio Attorney General Mike DeWine announced a $26 million settlement with CareSource, a Dayton-based managed health care company, and its related corporate entities. The settlement resolves allegations that CareSource submitted false data and received reimbursements from Medicaid for health care services it did not provide.

CareSource provides managed care benefits to Medicaid beneficiaries in several states. It is alleged that between 2001 and 2006, CareSource knowingly failed to provide required screening, assessment and case management for children with special health care needs and adults. As a result, CareSource received millions of dollars in Medicaid funds to which it was not entitled. Subsequently, CareSource, CareSource Management Group and CareSource USA Holding submitted false data to create the appearance they were providing these required services to improperly retain incentives received from Ohio Medicaid and to avoid penalties.

CareSource has agreed to pay the state of Ohio and the federal government a total of $26 million to resolve the allegations. Ohio’s share of the settlement is $10 million.

This case was initiated by a whistleblower action filed in the U.S. District Court for the Southern District of Ohio by two former CareSource employees. The False Claims Act’s qui tam provisions allow private individuals with knowledge of fraud to file suit on behalf of the United States and share in any recovery. As part of this settlement, the whistleblowers will receive a share of approximately $3.1 million from the federal portion of the settlement.

This settlement was the result of a coordinated effort by the Health Care Fraud Section of the Ohio Attorney General’s Office; the U.S. Attorney’s Office for the Southern District of Ohio; the Department of Justice, Civil Division, Commercial Litigation Branch; and the Health and Human Services, Office of Inspector General.

The whistleblower case is captioned United States ex rel. Laura Rupert & Robyn Herzog v. CareSource Management Group, Co., CareSource, & CareSource USA Holding, Co., Civil Action No. C2-06-961 (S.D. Ohio).

Source: Ohio Attorney General’s Office