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Vermont Uses Its New False Claims Act to Reach Medicaid Fraud Settlement

November 2, 2018

Vermont joined the ranks of 29 other states when it enacted a state False Claims Act, effective May 2015. This week the Vermont Attorney General announced what appears to be the first settlement under that law. Vermont settled with Keene Medical Products, a durable medical equipment supplier for $460,000.

Vermont accused Keene of a variety of false billings to and overpayments from the Vermont Medicaid Program. These include double billing and billing for services that were not medically necessary or reasonable.

Under the settlement, Keene will pay the state for its past transgressions. The settlement also includes a Corporate Integrity Agreement.  It requires an independent review of Keene’s claims for the prior two years, and up to three years following settlement. Keene will also be required to return to Vermont Medicaid any overpayment identified.  It must also establish an internal compliance program designed to prevent or limit future false claims.

The new Vermont False Claims Act (FCA) contains a qui tam or whistleblower provision that, like the federal FCA and most other state FCAs, enables a whistleblower to commence a FCA suit and collect a reward if the suit is successful. It also has a provision protecting whistleblowers from retaliation.

It appears there was no whistleblower in the Keene case, probably because the Vermont FCA is so new and Keene’s misconduct largely predated the law. But going forward, whistleblowers who know about misconduct in Vermont now have a remedy. And as more and more companies doing business in Vermont adopt (voluntarily or not) internal compliance programs as Keene agreed to here, the more potential whistleblowers should become aware of the law, their employer’s obligations, and the employee’s rights and options.

Client's False Claims Act case settles for $12.9 Million
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