Wednesday, November 12, 2014

The Computer Sciences Corporation Qui Tam – A Warning for North Carolina Medicaid Providers

Those of us who have followed the tumultuous roll out of NCTracks, North Carolina’s Medicaid Management Information System (“MMIS”), are familiar with the headaches it has caused Medicaid providers and the resulting class action lawsuit against the North Carolina Department of Health and Human Services (“NCDHHS”).  Today I’m writing to highlight a potentially more serious problem, one that poses a far greater risk to providers than the delayed and/or erroneous payments that followed the inception of NCTracks. Specifically, two recent headlines should serve as warning signs for North Carolina Medicaid providers.  

First, there’s: “New York City Agency and Vendor Bilked Medicaid, U.S. Says.”  On October 27 the United States Attorney’s Office for the Southern District of New York announced that it had filed a Complaint in Intervention in a $100 million qui tam (whistleblower) lawsuit accusing Computer Sciences Corporation, Inc. (“CSC”) and the City of New York (the “City”) of civil health care fraud.  U.S. ex rel. Vincent Forcier v. Computer Sciences Corporation, No. 1:12 Civ.01750 (S.D.N.Y. unsealed Oct. 27, 2014).  The Complaint accuses CSC and the City of violating the False Claims Act by using the City’s MMIS, developed and managed by CSC, to submit fraudulent billing data to Medicaid.  In a statement last Monday, United States Attorney Preet Bharara summarized the Complaint stating, “[a]s alleged, CSC and the City created computer programs that systematically, and fraudulently, altered billing data in order to get paid by Medicaid as quickly as possible and as much as possible.”  

Mr. Bharara then went on to praise the U.S. Department of Health and Human Services Office of the Inspector General (“DHHS OIG”) for its work investigating the case.  This brings me to the second headline: “HHS Watchdog Details 2015 Plans to Scrutinize Medical Billing.”  Lest you assume that the CSC case is an anomaly, on October 31 DHHS OIG released its Fiscal Year 2015 Annual Work Plan.  This year’s plan, which summarizes the priorities DHHS OIG will pursue with regard to DHHS programs this fiscal year, vows to scrutinize the billing, payment, and reimbursement practices of Medicaid providers. These include billing practices for adult day health care services, Medicaid payments for dental services, and state use of provider taxes to generate federal funding.  Thus, providers should expect (and prepare for) additional scrutiny in the coming fiscal year from government regulators and investigators.  

Further, in light of the CSC case, providers in states utilizing MMIS engineered and managed by CSC would be wise to complete a thorough review of their Medicaid billing practices and corporate compliance programs.  Followers of NCTracks know that North Carolina is one such state (Maryland is another).  In December 2008, CSC was awarded a $265 million contract to create the MMIS that is now known as NCTracks.  Since its launch on July 1, 2013, NCTracks has been plagued by glitches and complaints and has yet to be certified by the federal government.  Although NCDHHS may be making progress on these issues, if recent headlines are any indication, North Carolina Medicaid providers will continue to have cause for vigilance.  

Guest Blogger
Nathan A. Huff
November 7, 2014

Nathan A. Huff is an associate in the Raleigh Office of Phelps Dunbar LLP.  A former federal prosecutor, Mr. Huff is a member of Phelps Dunbar’s white collar defense and government investigations practice group.