The United States filed a complaint against the six health plans participating in the Uniformed Services Family Health Plan (USFHP), which offers health services to the military community,  for violating the False Claims Act. 

According to the 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 (Plans) contracted with the Department of Defense (DOD) to provide medical coverage to military families. The DOD pays the Plans a flat fee for enrolled beneficiaries. At some time prior to 2012,  the Plans began receiving improperly inflated payments stemming from two errors made by an actuarial firm when calculating the statutory payment limitation for USFHP beneficiaries over the age of 65. In 2012, the DOD’s actuarial firm and the Plans recognized the errors and improper payments. However, neither took steps to report the overpayments. Instead, they allegedly concealed the overpayments which led to the Plans being collectively overpaid by more than $300 million between 2008 and 2012.

The actuarial firm, Kennell & Associates Inc., entered a settlement with the DOD in 2023. Kennell & Associates agreed to pay $779,951 plus interest and contingent payments to resolve the False Claims Act allegations. The complaint related to the foregoing was originally brought by Jane Rollinson and Daniel Gregorie in the District of Maine under the qui tam provisions of the False Claims Act. Both Rollinson and Gregorie previously worked to Martin’s Point Health Care. 

When the United States announced the allegations, Acting Special Agent in Charge Brian J. Solecki of the DCIS Northeast Field Office commented that “[t]he 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.”

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection to false claim act investigations and litigation. If you need assistance with such a matter, please contact us today.