CLEARWATER — The Juvenile Welfare Board of Pinellas County is defending its role in a Medicaid scheme that the federal government said illegally boosted local hospitals’ share of federal funding.
The U.S. Department of Justice announced last week that BayCare agreed to a $20 million settlement with the federal government to resolve allegations made by a whistleblower that it took advantage of laws that required the federal government to match donations made to Florida’s Medicaid program.
BayCare’s donations were made through the Pinellas agency from October 2013 to September 2015.
“Everything was done out in the open and in accordance with our best understanding of applicable law and regulations at the time,” said Juvenile Welfare Board CEO Beth Houghton. She was hired in 2019, after the agency’s part in the Medicaid case had ended.
Her comment was part of a statement she read to the governing board near the end of Thursday’s two-hour meeting. The issue was not discussed during the meeting, and board members did not ask Houghton about the agency’s involvement.
The board includes public officials such as Pinellas-Pasco State Attorney Bruce Bartlett, the region’s top prosecutor, Public Defender Sara Mollo and Pinellas County Commissioner Pat Gerard.
The Juvenile Welfare Board kept 10 percent of BayCare’s donations and funneled the rest to the state Agency for Healthcare Administration for Florida’s Medicaid program, according to federal officials. Those funds were then paid back to BayCare for treating patients covered by Medicaid at four Pinellas County hospitals.
Since the funds were classified as donations, the federal government made matching payments — which also went to BayCare. Department of Justice officials called it a “fraud 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.
Houghton told her agency’s governing board that the donations were made as part of a Medicaid “buyback” program approved by the Florida Legislature. She said other local government agencies also participated in this program, but did not list them.
“JWB participated in this program to maximize revenue to be able to offer more services for kids in Pinellas County,” Houghton said. “Donations from hospitals funded qualifying JWB programs, which in turn freed up JWB funds to send to (the state) for the Medicaid buyback program for qualifying medical services for children in Pinellas County.”
Houghton said she looked into the donations made during the four-year period and said they were explained at public board meetings and detailed in the agency’s budget, annual reports and audits.
The donations stopped in 2015 when Houghton said the buyback ended. She said her agency cooperated with U.S. Attorney’s Office requests for information in 2017, and their most recent contact with investigators was in 2018.
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After the meeting, Bartlett said the donations were made before his time on the board. He said the federal government often interprets laws differently from accountants.
“It was an accounting issue that came back and hit (BayCare),” he said. “I do feel confident if the U.S. Attorney’s Office felt there was some inappropriate behavior on behalf of the JWB, they would have mentioned that in their findings.”
Gerard, who represents the Pinellas County Commission on the board, said she saw no reason for an independent review of the agency’s role. She said most of those involved in those decisions are no longer with the welfare board. Board chair Michael Mikurak was appointed in 2013. He attended Thursday’s meeting but said nothing about the Medicaid issue.
“The Department of Justice has been looking into this all this time,” Gerard said. “As much as I understand it, we did what we thought was legal, and maybe our end was legal.”
Pinellas County Inspector General Melissa Dondero, whose office investigates county agencies for abuse, fraud and waste, said the Juvenile Welfare Board is an independent public agency outside her jurisdiction.
BayCare denies the allegations and said it settled to “avoid the delay, uncertainty, and expense of litigation.”
A complaint filed in federal court on behalf of a federal whistleblower states that other Pinellas hospitals and a clinic also used donations and reimbursements to boost their Medicaid payments over a four-year period starting in 2012. The complaint also names Johns Hopkins All Children’s Hospital, Bayfront Health St. Petersburg hospital and Community Health Centers of Pinellas, which operates 13 local clinics and is now named Evara Health.
Between 2011 and 2015, the complaint said, the scheme resulted in $52 million in additional Medicaid payments. The welfare board’s share of donations involving all the hospitals named in the complaint was $3.7 million over four years.