Maxim Healthcare Services, a Columbia, Md.-based healthcare staffing and home healthcare provider, agreed to pay $150 million in a settlement to resolve criminal and civil charges relating to a scheme to defraud Medicaid programs and the Veterans Affairs program of more than $61 million, the U.S. Attorney’s Office for the District of New Jersey reported today. The settlement includes a criminal penalty of $20 million and $130 million in civil settlements for a total of $150 million.

Incidents covered under the settlement took place from 2003 to 2009. Maxim has already taken steps under a “Deferred Prosecution Agreement” to make reforms and take remedial action.

“We take full responsibility for these events set forth in the Deferred Prosecution Agreement and we are pleased to reach a settlement that will allow us to move forward with the important work of caring for our patients and clients who depend on us each and every day,” said Maxim CEO Brad Bennett.

The agreement acknowledges that Maxim’s conduct did not adversely affect patient care, according to the company.

Reforms and remediations taken by Maxim under the agreement include:

• The appointment of a new CEO in October 2009.
• Terminating senior executives identified as responsible and replacing them as well as establishing new positions.
• Establishing the post of chief compliance officer.
• Creating a clinical education department.
• Updating or revising more than 120 policies and procedures.
• Adding 85 directors of clinical services and almost 450 new clinical supervisors and case managers.
• Developing a set of core values in addition to enhanced mission and vision statements.
• Doubling the size of its compliance and ethics department.
• Adding new software systems to support compliance and enhance patient care.
• Restructuring its compensation and talent management programs.

The case also includes individuals. Eight former Maxim employees, including three senior managers, and the parent of a former Maxim patient, have pleaded guilty to felony charges, according to the U.S. Attorney’s Office. All but two are still awaiting sentencing. The two sentenced received three years of probation each. One also received a fine of $4,000 and the other a fine of $5,000.

False bills were submitted from 2003 through 2009, according to the U.S. Attorney’s Office. The bills were concealed through means such as modifying time sheets, improperly submitting billings from unlicensed offices through licensed offices or modifying documents.

The settlement requires the company to continue cooperating with federal and state criminal investigations of former Maxim executives and employees, according to the U.S. Attorney’s Office. The company will also pay for an independent monitor to review its business practice and report on the company’s compliance efforts. That monitor will be Peter Keith of the law firm of Gallagher, Evelius and Jones, which is headquartered in Baltimore.

“Over the past two years, we have worked diligently to build an infrastructure of systems, policies and controls to ensure that employees at every level of the organization not only adhere to all applicable laws and regulations, but also honor our company’s own protocols and code of conduct. Today we operate on a solid foundation with an infrastructure designed to ensure high quality patient care and client services.” Bennett said.

“While we regret the circumstances that led to these agreements, the resulting enhancements have clearly made Maxim a better and stronger company. Most importantly, at Maxim there is now a renewed commitment to the highest standards of conduct and consistent delivery of high quality patient care,” he said. “This marks the beginning of a new chapter for our company, and Maxim’s commitment to serving our patients and clients has never been stronger.”

This case began after a whistleblower sounded the concerns, and that person will get approximately $15.4 million as his share of the recoveries, according to the U.S. Attorney’s Office.