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March 14, 2024

Martin's Point disputes DOJ claim of receiving inflated payments for health care

Martin's Point Health Care, one of six health plans named in a federal complaint over inflated government payments for health care services, said Wednesday the company "vigorously disputes" the claim.

In a prepared response, the Portland-based health plan and provider said the government "paid Martin’s Point exactly the amounts that were negotiated and agreed to, no more."  

The health care plans participated in the Uniformed Services Family Health Plan program, as well as their trade group, the US Family Health Plan Alliance.

The allegation is that the plans 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 U.S. Department of Justice said in a news release.

In addition to Martin’s Point Health Care, the plans named in the complaint were Brighton Marine Health Center in Boston; Christus Health Services in Irving, Texas; Johns Hopkins Medical Services Corp. in Timonium, Md.; Pacific Medical Center in Seattle; and St. Vincent’s Catholic Medical Centers of New York.

“Contractors have an obligation to return overpayments, and we will hold accountable contractors that knowingly and improperly retain such funds,” said Brian M. Boynton, principal deputy assistant attorney general and the 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.”

In a related move, the United States reached a settlement with Department of Defense contractor Kennell & Associates Inc., a consulting firm based in Falls Church, Va. Under the terms of the settlement agreement, Kennell & Associates has agreed to pay the U.S. $779,951, plus interest, as well as contingent payments based on its annual contract revenue and cash reserves through 2025.  

The Uniformed Services Family Health Plan program is one of the health care options available to military personnel, retirees and their families.

Through the Uniformed Services Family Health Plan program, the Department of Defense pays the plans capitated rates to provide health care 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. The "plans took steps to conceal the existence of the overpayments from the government and continued to submit invoices at the inflated payment rates."

The 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, the government said.

Martin's Point response

In its statement to Mainebiz, Martin's Point noted that it has been a partner to the Department of Defense and the Uniformed Services Family Health Plan program for more than 40 years. A related USFHP contract with Martin's Point has been renewed twice in the past decade, in 2013 and 2023; it is under contract through 2033.

The statement read in part: "Martin’s Point provided the services it agreed to provide in reliance on those agreed-to rates. The Government is now demanding a refund of a portion of the rates that it had expressly agreed to pay, arguing more than 12 years after the fact that the plans should repay the Government for errors the Government itself made in calculating the rates.

"Martin’s Point is confident that the evidence in this case will show that Martin’s Point met its obligations under the USFHP contract and did not receive an overpayment."

Whistleblower provisions

According to the complaint, investigators were following up on a complaint in lawsuit originally brought under the whistleblower provisions of the False Claims Act by Jane Rollinson and Daniel Gregorie in the District of Maine.

From 2007 to 2015, Rollinson worked at Martin’s Point Health Care, including as its interim chief financial officer. Gregorie was a consultant to the CEO and board of Martin’s Point Health Care and later served on its board of trustees.

The False Claims Act permits a private party to file an action on behalf of the United States and receive a portion of any recovery. The United States has the ability to intervene in such lawsuits, as it has in this case. 

The investigation

The case was investigated by the Civil Division’s commercial litigation branch, fraud section, and the U.S. Attorney’s Office for the District of Maine, with assistance from the Defense Health Agency.

Attorneys Diana Cieslak, Evan Ballan and Amy Kossak of the Civil Division’s fraud section and assistant U.S. attorneys Andrew Lizotte and Sheila Sawyer for the District of Maine are handling the case.

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