TAMPA, Fla. (CN) – A Florida-based HMO provider will pay $32.5 million to settle claims it schemed to obtain higher federal reimbursements for Medicare plans.
The settlement comes in the wake of a Justice Department filing a lawsuit against Freedom Health Inc. and its founders, accusing them of engaging in “practices and machinations” to secure elevated reimbursements the company was not entitled to.”
Under the terms of the deal, which was announced May 30, Freedom Health will pay the government $31.7 million, while Siddhartha Pagidipati, the company’s chief operating officer, will pay $750,00 to resolve his alleged role in one of these schemes.
“Today’s result sends a clear message to the managed care industry that the United States will hold managed care plan providers responsible when they fail to provide truthful information,” said Acting Assistant Attorney General Chad Readler of the Justice Department’s civil division, in a written statement.
In a statement of his own, Pagidipati said, “These are disputed claims and with this settlement, we have agreed to disagree without any admission of liability to avoid the time and expense of prolonged litigation.”
Bijal Patel, Freedom Health’s the corporate counsel for Freedom Health said “although Medicare managed care is a complex and constantly changing industry in which it is common to have differing interpretations of regulations, with this settlement, we have agreed to resolve disputed claims without any admission of liability in order to avoid delay and the expense of litigation, so that we can focus on providing quality care, member service, and maintaining the highest Medicare Star Ratings.”