Former Indiana state officials John McCullough and James Holden filed a whistleblower lawsuit alleging that several Indiana hospital systems and managed care entities engaged in widespread Medicaid fraud, potentially costing the state hundreds of millions of dollars. The lawsuit, filed in early 2021 but only unsealed recently, accuses four managed care companies of misusing Medicaid funds and six hospital systems of submitting false claims to Medicaid.
The plaintiffs, who previously held roles in Indiana Medicaid oversight, claim that the defendants were knowingly engaging in improper billing practices, including false claims related to hospital re-admissions, transfers, and 24-hour stays, as well as claims for services provided after a patient’s death or duplicate claims. The lawsuit alleges that the defendants were aware of their obligations to prevent such violations but chose to ignore them.
The suit also suggests that political pressure from lobbyists for health insurers and hospitals led to a reduction in efforts to recoup overpayments based on analysis from IBM Watson Health, contributing to a budget shortfall. The defendants named in the lawsuit include prominent health care entities such as Anthem, IU Health, and Community Health.
If successful, the lawsuit could result in the recovery of three times the total amount of damages for the state and federal governments. The case highlights the importance of rigorous oversight and compliance measures in healthcare billing practices to prevent potential financial losses and ensure the integrity of the Medicaid system.
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