BayCare has agreed to pay a $20 million settlement to the federal government to resolve allegations that it violated federal law to boost its share of Medicaid funding.
The Tampa Bay hospital chain made donations to the Juvenile Welfare Board of Pinellas County from October 2013 to September 2015. That was funneled to the state Agency for Healthcare Administration for Florida’s Medicaid program, according to the U.S. Department of Justice. The bulk of those funds were then paid back to BayCare for treating patients covered by Medicaid.
Since the funds were classified as donations, the federal government was required to make matching payments — which also went to BayCare.
The company was thus able to recoup the bulk of its original donations and receive the matching federal funds, according to the settlement agreement. That violates federal law, which views requests for matches based on donations from medical providers as false claims.
The federal complaint does not say who arranged, directed or approved the scheme.
Medicaid covers medical costs for some low-income households and individuals with disabilities. It is jointly funded by the federal government and the states.
“When health care providers participate in fraud schemes to boost federal payments, they do so at the expense of federal health care programs,” said a statement from Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of Inspector General. “Our office is committed to protecting the integrity of the Medicaid Program, and we will use all available civil remedies to recover the ill-gotten gains obtained by those who defraud it and other government health care programs.”
Federal officials said the four BayCare hospitals involved are all in Pinellas County: St. Anthony’s Hospital in St. Petersburg, Mease Countryside Hospital in Safety Harbor, Mease Dunedin Hospital and Morton Plant Hospital in Clearwater.
BayCare, which is headquartered in Clearwater, runs 15 hospitals in the Tampa Bay region. In a statement to the Tampa Bay Times, the company described the settlement as a “disagreement with the government over a complex regulatory question.”
“BayCare has admitted no wrongdoing and expressly denies the allegations against it, but we have settled to avoid the delay, uncertainty, and expense of litigation. At all times, BayCare fully cooperated with the government with respect to this matter. BayCare remains committed to the highest integrity practices, and we look forward to continuing to serve all patients and our communities’ health needs.”
The Justice Department said it received information about the donations from a former hospital reimbursement manager in Florida who, under the terms of the whistleblower provisions of federal law, will receive $5 million from the settlement. The settlement agreement also requires BayCare to pay $25,000 to the whistleblower for expenses and legal costs.
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“We will use all available civil remedies to recover the ill-gotten gains obtained by those who defraud it and other government health care programs,” said a statement from U.S. Attorney Roger Handberg of the Middle District of Florida.
A complaint filed in federal court on behalf of the whistleblower states that other Pinellas hospitals and a clinic also used donations and reimbursements to boost their Medicaid payments over a 4-year period starting in 2012. The Juvenile Welfare Board agreed to accept the “impermissible” donations and, in return, was allowed to keep 10 percent of the funds.
Between 2011 and 2015, the scheme resulted in $52 million in additional Medicaid payments, the complaint states. The juvenile welfare board’s share of donations involving all the hospitals named in the complaint was $3.7 million over four years.
Juvenile Welfare Board spokesperson April Putzulu said the donations predate the tenure of CEO Beth Houghton, who was hired in 2019. Putzulu said the publicly-funded agency will not comment on litigation involving another entity.
The other local hospitals named in the whistleblower complaint are Johns Hopkins All Children’s Hospital and Bayfront Health St. Petersburg hospital.
Officials from Community Health Systems, a Fortune 500 company in Tennessee that owned Bayfront when the donations were made, did not respond to a call or emails seeking comment Thursday.
Bayfront Health St. Petersburg was purchased by Orlando Health in 2020. The company released this statement:
“Under Orlando Health’s leadership, Bayfront Health St. Petersburg adheres to strict internal compliance and ethics standards and oversight which would prevent this kind of unfortunate event.”
Officials from Johns Hopkins All Children’s Hospital said in a statement that the hospital is focused on providing the best possible care for children: “We are still in litigation related to this matter and limited in our ability to provide further statements.”
Also named in the whistleblower complaint is Community Health Centers of Pinellas, which operates at 13 clinics around the county and is now named Evara Health. A call requesting comment was not returned.
The status of the federal cases involving Bayfront Health St. Petersburg and Evara Health were not known.