INDIANAPOLIS — A recently unsealed federal lawsuit alleges Indiana’s Medicaid program was politically pressured into looking the other way when hundreds of millions of dollars in overpayments were identified.
The IndyStar was first on the story filed by James McCullough and James Holder, both former state employees who filed the case under seal in February 2021. The newspaper story cited the overpayment was in excess of $700-million.
Under federal law, these kinds of ‘qui tam’ or whistleblower suits offer the local US Attorney’s Office 60 days to examine claims made in the case with the option of keeping the lawsuit under seal while a federal investigation continues.
An unusual facet of qui tam cases is that whistleblowers filing these lawsuits are eligible for court awards. If the court determines a violation of the False Claims Act has occurred, the penalty is triple the amount defrauded.
“If the government intervenes and joins in in the case, then the whistleblower can be entitled to 15 to 25% of the amount the government collects,” explained Cindy Cho, a lecturer at the Indiana University Maurer School of Law.
Some of the exhibits filed on behalf of McCullough and Holder include an internal analysis of the state’s Medicaid program from IBM Watson.
One exhibit details how IBM Watson identified that over three years, $285 million in paid-for in-patient hospital stays should have been billed as cheaper out-patient care.
A couple filings suggest the state’s Medicaid program paid for healthcare to people who were dead.
Another filing shows that the state-run Medicaid and managed Medicaid programs identified $300 thousand paid to care for deceased patients.
There are 66 defendants in the lawsuits. They include Anthem Insurance companies and 55 Indiana hospitals. On behalf of the hospitals, FOX59/CBS4 reached out to their lobbying group, the Indiana Hospital Association.
As of this article’s publication, there has not been a response.
