On February 1, the State of Ohio reached a settlement with Dayton-based managed care organization (MCO), CareSource. The company provides contract medicaid management for the State of Ohio.
The U.S. Government and two former employees of the MCO were also parties to the suit and will split a $26 million settlement. The lawsuit alleged that CareSource falsely billed the state (and federal government) for medical services that were not delivered. CareSource denies the wrongdoing and settled to make the case end.
The lawsuit was initiated in federal court by two former employees of the company who utilized the provisions of the false claims act that allows private individuals with knowledge of fraud to file suit on behalf of the United States and share in recovery. This citizen right to file suit on behalf of the U.S. Government is known as qui tam and has roots to the original False Claims Act signed into law by Abraham Lincoln.
Attorney General Mike DeWine announced the settlement hailing it a victory to Ohio taxpayers and for protecting Ohio's most vulnerable citizens. The Attorney General condemned the MCO for defrauding and failing to provide health care services.
Of concern to manufacturers were other comments the Attorney General made that seem to favor Ohio enacting some form of its own false claims act. Twenty seven other states are believed to have state-level false claims acts. Ohio lawmakers have considered but never enacted such a provision. A change in federal law now provides a larger cut of settlements and judgments to states with their own laws on the books.
Manufacturing leaders familiar with the principle have generally opposed the enactment of state-level false claims act. "The cons are outweighed by the pros," said OMA's Ryan Augsburger who also chairs the Ohio Alliance for Civil Justice. "False claims may well become the next ATM for the plaintiff's bar," Augsburger said, noting that "I have to wonder how real the complaint was in this dispute since the state agency that manages the contract with CareSource was quoted as saying it is comfortable with the contractor and intends to continue contracting with the company."