Lakeland Regional Health to pay $4 million to settle Medicaid lawsuit
LAKELAND — Lakeland Regional Health will pay $4 million to settle a lawsuit alleging its medical center made improper donations to Polk County in an attempt to increase its Medicaid payments.
Florida's Medicaid program provides medical insurance assistance to low-income individuals and people with disabilities. It is jointly funded by the federal government and the state. Under federal law, Florida's share of Medicaid payments for services must come from the state or local governments, not "non-bona fide donations."
"A non-bona fide donation is a payment — in cash or in kind — from a private provider to a governmental entity that is then returned to the private provider through a payment by Medicaid," the U.S. Department of Justice said in a press statement. "Because Medicaid services are reimbursed jointly by the federal and state governments, a non-bona fide donation causes federal expenditures to increase without any corresponding increase in state expenditures, since the state share of the Medicaid payments to the provider comes from and is returned to the provider."
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The U.S. Department of Justice filed the lawsuit against Lakeland Regional Health Medical Center alleging between October 2014 and September 2015 the hospital made improper donations to Polk County, assuming and paying part of the county's financial obligations to other medical providers.
The lawsuit asserted donations were intended to increase the federal half of the Medicaid payments made to Lakeland Regional. Its donations had freed up funds for Polk County to make payments to the state for the state's share of Medicaid, which was "matched" by the federal government before being returned to Lakeland Regional Medical Center. If true, the Medicaid payments the hospital received were a mix of federal funds and its own donations being returned.
“When private parties make improper donations to fund the state share of Medicaid, they undermine a key safeguard for ensuring the integrity of the Medicaid program,” Principal Deputy Assistant Attorney General Brian Boynton said in a press statement. “Medicaid expenditures should be determined by beneficiaries’ medical needs rather than by donations by private hospitals to local units of government.”
Lakeland Regional Health "steadfastly disputes" the federal government's allegations it violated federal laws, according to LRH spokesperson Kendra Kramer, but rather called it a "a disagreement over the interpretations of a complex regulatory matter." A settlement agreement was reached March 1.
"However, we feel it is necessary to move forward with this resolution to avoid the delay and expense of protracted litigation. We look forward to focusing on serving our patients and the community," LRH's statement read.
Lakeland Regional has until March 15 to pay the settlement to the federal government. In addition, the health care provider has 90 days to review any unallowable costs previously sought from Medicaid or other federal programs, and allow the U.S. government to recoup any overpayment plus interest and penalties.
The U.S. Department of Justice also has the right to review, audit or re-examine Lakeland Regional Health Medical Center's books and records to ensure its has recovered all funds.
Sara-Megan Walsh can be reached at swalsh@theledger.com 2-7545. Follow on Twitter @SaraWalshFl.
This article originally appeared on The Ledger: Lakeland Regional Health accused of improper Medicaid donations
