LRMC pays $4M to DOJ over allegedly impermissible Medicaid donations
The donations, according to the Department of Justice, were aimed at increasing Medicaid payments received by LRMC.
Photo: Blanchi Costela/Getty Images
Lakeland Regional Medical Center (LRMC) in Lakeland, Florida, has agreed to pay the United States $4 million to resolve allegations that it made donations to a local unit of government to improperly fund the state's share of Medicaid payments to LRMC.
The U.S. government has alleged that, between October 2014 and September 2015, LRMC made improper, non-bona fide donations to Polk County by assuming and paying some of the county's financial obligations to other healthcare providers. These donations, according to the DOJ, were designed to increase Medicaid payments received by LRMC by freeing up funds for the county to make payments to the state as the state share of Medicaid payments to LRMC.
This state share was "matched" by the federal government before being returned to LRMC as Medicaid payments, said the DOJ. The Medicaid payments LRMC received were thus funded by the federal government and LRMC's own donations, in violation of the prohibition on non-bona fide donations.
WHAT'S THE IMPACT
The Florida Medicaid program provides medical assistance to low-income individuals and individuals with disabilities. It is jointly funded by the federal and state governments. Under federal law, Florida's share of Medicaid payments must consist of state or local government funds, and may not come from "non-bona fide donations" from private healthcare providers, such as hospitals.
A non-bona fide donation is a payment – in cash or in kind – from a private provider to a governmental entity that is then returned to the private provider through a payment by Medicaid. Because Medicaid services are reimbursed jointly by the federal and state governments, a non-bona fide donation causes federal expenditures to increase without any corresponding increase in state expenditures, since the state share of the Medicaid payments to the provider comes from and is returned to the provider, said the DOJ.
The prohibition of this practice, the agency said, ensures that states are in fact paying a share of Medicaid payments and thus have an incentive to curb Medicaid costs and prevent unnecessary services.
THE LARGER TREND
The DOJ has been active in pursuing potential healthcare-related fraud. Just last month the agency charged more than two dozen people for their alleged participation in a wire fraud scheme that created an illegal licensing and employment shortcut for aspiring nurses.
According to three recently unsealed indictments returned by a South Florida federal grand jury and documents filed by federal prosecutors, defendants purportedly engaged in a scheme to sell fraudulent nursing degree diplomas and transcripts obtained from accredited Florida-based nursing schools to people seeking licenses and jobs as registered nurses (RNs) and licensed practical/vocational nurses (LPN/VNs).
The bogus diplomas and transcripts qualified purchasers to sit for the national nursing board exam and, after passing it, to obtain licenses and jobs in various states as RNs and LPN/VNs, the DOJ said.
The overall scheme involved the distribution of more than 7,600 fake nursing diplomas issued by three South Florida-based nursing schools: Siena College in Broward County, Palm Beach School of Nursing in Palm Beach County and Sacred Heart International Institute in Broward County. These schools are now closed.
Each defendant faces up to 20 years in prison, the DOJ said.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
