Defense Contractor Pays $1.1 Million to Resolve Civil Fraud Claims

Arent Fox

Defense Contractor Pays $1.1 Million to Resolve Civil Fraud Claims

Islands Mechanical Contractor, Inc. (IMC), a construction contractor, has agreed to pay $1.1 million to settle civil fraud claims relating to improperly submitted claims for stand-by or delay costs associated with construction contracts at Naval Station Guantanamo Bay. The government alleges the contractor claimed costs for equipment that was not needed for the project, the actual age of the equipment failed to match the claimed age, and the equipment was used for other projects rather than being placed on stand-by. Likewise, the contractor claimed labor costs for workers who were purportedly on stand-by, but were actually reassigned to other projects, with falsified payroll records supporting their stand-by status.

The USAO press release is here.

Philadelphia-Area Hospital and Vendor Resolve FCA Claims for $325,000

Phoenixville Hospital and Phoenixville Hospital Co., LLC (Phoenixville) will pay $100,000 to settle False Claims Act claims for allegedly causing the submission of altered forms to the Pennsylvania Department of Human Services. Firstsource Solutions, Ltd., Firstsource Solutions USA, LLC, and its predecessor Medassist, Inc. (collectively, Firstsource), a revenue cycle management services provider, will pay $225,000 for its role in the alleged scheme.

According to the government, Phoenixville, which provided inpatient treatment and emergency room care to Medicaid recipients, caused to be altered a standard Employability Assessment Form used by the Pennsylvania Department of Public Welfare office. The form was allegedly altered to exclude the option for the hospital to certify that the self-pay patient was “Employable,” thereby permitting the hospital to bill Medicaid for patients who were not disabled or entitled to Medicaid coverage. Firstsource, which assists with the submissions for determination of eligibility of self-pay patients, allegedly knowingly submitted or caused the submission of false claims to the Medicaid program from August 2009 through February 2012.

The USAO press release is here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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