Area firm to pay $31.7M in Medicare scheme case

TAMPA — Tampa-based managed care services provider Freedom Health Inc. and related corporate entities agreed to pay $31,695,593 to resolve allegations the companies violated the False Claims Act, according to a press release from the Department of Justice.

The statement says the company engaged in illegal schemes to maximize payment from the government in connection with Medicare Advantage plans. Former Freedom Health COO Siddhartha Pagidipati has agreed to pay $750,000 to resolve his alleged role in one of the schemes, the release states. According to court documents, Freedom Health's owner is America's 1st Choice Holdings of Florida LLC, a holding company controlled by prominent area businessman and philanthropist Dr. Kiran Patel.

The government alleged Freedom Health submitted or caused others to submit unsupported diagnosis codes to the Centers for Medicare and Medicaid Services, and according to a press release, it resulted in inflated reimbursements from 2008 to 2013 in connection with two of the company's Medicare Advantage plans in Florida.

Freedom officials, in an email statement, denied admission of liability in the case.

“We at Freedom Health Inc. and Optimum HealthCare Inc. are proud of achieving 4.5 and 5-Star Medicare Ratings for exceptional quality care and service to our members, and we worked diligently with the government to achieve an amicable resolution," says Freedom Health and Optimum HealthCare corporate counsel Bijal Patel in the statement. "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."

“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," adds Pagidipati.

The allegations were brought in a lawsuit under the whistleblower provisions of the Federal False Claims Act and the Florida False Claims Act. Former Freedom Health employee Darren Sewell is the whistleblower in the action.

“When entering into agreements with managed care providers, the government requests information from those providers to ensure that patients are afforded the appropriate level of care,” says Acting Assistant Attorney General Chad Readler of the Justice Department's Civil Division in the statement. “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.”

(This story was updated to include comments from Freedom Health officials.)