TAMPA — Freedom Health Inc., a Tampa-based provided of managed health care services run by Dr. Kiran C. Patel, agreed to pay more than $31 million to resolve allegations that the company was trying to maximize its payment from the government by taking advantage of Medicare plans.
Freedom Health was accused of violating the False Claims Act by engaging in illegal schemes, the Justice Department announced in a press release Wednesday. Freedom Health agreed to pay $31,695,593 to resolve the allegations and company co-founder and former officer Siddhartha Pagidipati will pay $750,000 to resolve separate allegations relating to service area expansion issues dating back to 2008.
"When entering into agreements with managed care providers, the government requests information from those providers to ensure that patients are afforded the appropriate level of care," said Chad A. Readler of the Justice Department's civil division, in a statement. "Today's result sends a clear message to the managed care industry that the United States will hold managed care plan providers responsible when they fail to provide truthful information."
In a statement, Pagidipati said the claims remain disputed. "With this settlement, we have agreed to disagree without any admission of liability to avoid the time and expense of prolonged litigation," he said.
Added Freedom Health corporate counsel Bijal Patel: "Although Medicare managed care is a complex and constantly changing industry in which it is common to have differing interpretations of regulations, with this settlement, we have agreed to resolve disputed claims without any admission of liability in order to avoid delay and the expense of litigation, so that we can focus on providing quality care, member service, and maintaining the highest Medicare Star Ratings."
The government alleged that Freedom Health submitted or caused others to submit unsupported diagnosis codes, which resulted in inflated reimbursements from 2008 to 2013 in connection with two of their Medicare Advantage plans operating in Florida, the release said. It also alleged that Freedom Health made material misrepresentations in regards to the scope and content of its network of providers, which included physicians, specialists and hospitals in an application to expand its services into new counties in Florida and other states.
These issues were brought to light by a whistleblower, which prompted a lawsuit. The whistleblower's share in this case has not yet been determined, the release stated. The whistleblower complaint, which was unsealed Wednesday, was filed by Dr. Darren D. Sewell, who worked at Freedom Health from 2007 to 2012. He rose through the ranks to become chief medical officer before transferring to the Medicare revenue management department under the role of vice president of special projects. He filed a whistleblower lawsuit in 2009, which lead the government to investigate the case.
The corporate entities related to Freedom Health which were part of the settlement include: Optimum HealthCare Inc., America's 1st Choice Holdings of Florida LLC, Liberty Acquisition Group LLC, Health Management Services of USA LLC, Global TPA LLC, America's 1st Choice Holdings of North Carolina LLC, America's 1st Choice Holdings of South Carolina LLC, America's 1st Choice Insurance Company of North Carolina Inc. and America's 1st Choice Health Plans Inc.