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Emerging Issues With US Family Health Plan Fraud

by Hoyer Law Group, PLLC | Jun 5, 2024 | Legal News

What Is The USFHP?

The US Family Health Plan (USFHP) is a health care choice for eligible beneficiaries under the Department of Defense’s TRICARE Prime program. Health care is provided to active duty family members, activated National Guard and Reserve family members, and retirees and their family members, including certain “grandfathered” beneficiaries who are age 65 and older. 

The USFHP program is one of the healthcare options available to military personnel, retirees and their families. Six health plans are eligible to participate in this program, each of which is a defendant in the government’s complaint: Brighton Marine Health Center, CHRISTUS Health Services, Johns Hopkins Medical Services Corporation, Martin’s Point Health Care, Pacific Medical Center and St. Vincent’s Catholic Medical Centers of New York.

Through the USFHP program, the DOD pays the plans capitated rates to provide healthcare services to their enrollees. According to the complaint, in June 2012, the plans learned of calculation errors that had inflated the rates they had been paid in prior years. Nevertheless, the plans took steps to conceal the existence of the overpayments from the government and continued to submit invoices at the inflated payment rates. 

Using The False Claims Act As A Tool To Fight Fraud Against The USFHP

The United States recently settled allegations against six health plans participating in the USFHP program, as well as their trade group, the US Family Health Plan Alliance. The US alleged the Defendants violated the False Claims Act by knowingly retaining erroneously inflated payments for healthcare services the health plans contracted to provide to retired military members and their families. The United States has also reached a settlement with Department of Defense (DOD) contractor Kennell & Associates Inc., a consulting firm, related to the conduct. 

The US’ complaint alleges that during discussions about rates for the subsequent year, some of the plans even asked the government to continue paying them at the prior, inflated rates even though, by that time, those plans knew the rates were inflated by the errors.

“Contractors have an obligation to return overpayments, and we will hold accountable contractors that knowingly and improperly retain such funds,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We are committed to ensuring that taxpayer funds for healthcare services to military members and their families are actually used for that purpose, not to enrich those charged with administering the program.”

“Protecting the integrity of the healthcare system for our military members and their families, is a top priority of the Defense Criminal Investigative Service (DCIS), the law enforcement arm of the Department of Defense Office of Inspector General,” said Acting Special Agent in Charge Brian J. Solecki of the DCIS Northeast Field Office. “The DOD expects companies to adhere to contract requirements and DCIS will continue to work with our law enforcement partners and the Justice Department to hold DOD contractors who engage in fraudulent activity at the expense of the U.S. military accountable for their actions.”

Under the terms of the settlement agreement, Kennell & Associates has agreed to pay the United States $779,951, plus interest, as well as contingent payments based on its annual contract revenue and cash reserves through the year 2025. The settlement amount is based on Kennell and Associates’ ability to pay.

The United States’ intervention in this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement.

If you or someone you know is dealing with employment issues or has information on potential government fraud, it’s essential to have experienced legal representation. Our skilled government lawyers at Hoyer Law Group, PLLC are dedicated to protecting your rights and achieving justice. Contact us today to discuss your case and explore your legal options.

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