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Troubled US Health-Care Staffing Chain Settles With Government for $150 Million

Troubled US Health-Care Staffing Chain Settles With Government for $150 Million

One of the largest health-care staffing companies in the US has agreed to pay $150 million to settle sweeping criminal and civil fraud allegations of submitting false bills to federal and state health programs.

Maxim Healthcare Services Inc. was accused of submitting more than $61 million in fraudulent billings to government health programs for services that were either not provided or not eligible for reimbursement, according to a press release Monday from the U.S. Department of Justice. Eight former Maxim employees, as well as the parent of a former Maxim patient, have pleaded guilty to felony charges.

A different set of problems involving Maxim came up during a ProPublica investigation into the oversight of registered nurses in 2009. We identified several nurses hired by the Maryland-based company despite a record of problems.

While working for Maxim, registered nurse Orphia Wilson, for example, allegedly failed to call 911 after a child stopped breathing while under her care. He died. After the incident, Wilson lost her Florida nursing license but got a job with another Maxim office in Connecticut. There, she fell asleep, then ignored — or possibly turned off — ventilator alarms that signaled the boy was not getting enough oxygen, state records show. That child died, as well.

Wilsonwrote in a sworn statement to investigators later: "I am very sorry about the deaths of the babys [sic] I cared for. Believe me I went through my share of guilt."

Wilsonwas sentenced to jail in 2008 for reckless endangerment and hiding her Florida discipline from Connecticut.

In another instance, Maxim hired a nurse who had previously lost his license in Minnesota for stealing drugs, and faced a pending action against his California license for similar allegations, according to nursing board records and interviews.

The firm also hired a nurse whose license had been previously suspended by Virginia after she was found asleep on a sofa under a blanket when she was supposed to be taking care of a four-month-old child with multiple health problems. After testing positive for drugs on the job with Maxim, she lost her nursing license.

Such oversights in hiring were common in the temporary nurse staffing industry, we found. The articles focused on how regulators across the country did little to scrutinize troubled nurses who crossed state lines to continue working. Our earlier stories did not identify Maxim by name. We have called Maxim for comment Monday and will update this post with their response when we get it.

The main focus of the settlement, filed in U.S. District Court in New Jersey, does not involve Maxim's background checks of its nursing staff, but rather the company's billing practices. In order to conceal the fraud, the government alleged, Maxim employees falsified time sheets and covertly submitted bills for services delivered by unlicensed offices.

“Not only did Maxim fail to back up its billings with proper documentation, we found that Maxim frequently billed for services it never rendered or care it never provided,” said Tony West, assistant attorney general in charge of the Justice Department's civil division, in a statement. “And, we learned, to avoid detection, Maxim's former officers and employees engaged in a variety of tactics to conceal the company's fraud.”

Maxim agreed to pay a $20 million criminal fine and abide by terms of a deferred prosecution agreement. The company is also paying $70 million to the federal government and $60 million to 42 states to settle civil allegations.

Among the Maxim employees who have pleaded guilty is Gregory Munzel, who was regional account manager of Maxim's Charleston, S.C., office from 2001 to 2005. In his plea hearing in December 2009, Munzel acknowledged fabricating documentation to make it appear that caregivers were properly credentialed when, in fact, they were not. He said he did so in response to sales pressure from his superiors to generate more revenue. He also said such falsifications were a common practice by employees in his office.

In announcing the settlement, the government went out of its way to praise Maxim for reforming its practices, including leadership changes, a stronger corporate compliance program and cooperation with prosecutors in the case.

In a statement, Maxim CEO Brad Bennett said, “While we regret the circumstances that led to these agreements, the resulting enhancements have clearly made Maxim a better and stronger company. Most importantly, at Maxim there is now a renewed commitment to the highest standards of conduct and consistent delivery of high quality patient care.”

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