Health Care Provider Pays $4 Million For Making Prohibited Donations Toward County Medicaid Funding |

Health Care Provider Pays $4 Million For Making Prohibited Donations Toward County Medicaid Funding

A $4 million settlement by Lakeland Regional Medical Center (LRMC) in Lakeland, Florida, alerts other health care providers and state and local governments administering Medicaid-funded care to confirm their arrangements don’t involve prohibited donations.

Under federal law, a state’s share of Medicaid payments must consist of state or local government funds, and may not come from “non-bona fide donations” from private health care providers, such as hospitals.

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.

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. The prohibition of this practice ensures that states are in fact paying a share of Medicaid payments and thus have an incentive to curb Medicaid costs and prevent unnecessary services.

On March 30, the Justice Department announced that LMRC has agreed to pay the United States $4 million to resolve allegations that it made prohibited donations to a local unit of government to improperly fund the state’s share of Medicaid payments to LRMC.

According to the Justice Department between October 2014 and September 2015, LRMC made improper, non-bona fide donations to Polk County, Florida by assuming and paying certain of Polk County’s financial obligations to other healthcare providers. These donations were designed to increase Medicaid payments received by LRMC, by freeing up funds for the County to make payments to the State as the state share of Medicaid payments to LRMC. This state share was “matched” by the federal government before being returned to LRMC as Medicaid payments. The Medicaid payments LRMC received were thus funded by the federal government and LRMC’s own donations, in violation of the prohibition on non-bona fide donations.

More Information

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About the Author

Recognized by her peers as a Martindale-Hubble “AV-Preeminent” (Top 1%) and “Top Rated Lawyer” with special recognition LexisNexis® Martindale-Hubbell® as “LEGAL LEADER™ Texas Top Rated Lawyer” in Health Care Law and Labor and Employment Law; as among the “Best Lawyers In Dallas” for her work in the fields of “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law” by D Magazine, Cynthia Marcotte Stamer is a practicing attorney board certified in labor and employment law by the Texas Board of Legal Specialization and management consultant, author, public policy advocate and lecturer widely-known for 35 plus years of health industry and other management work, public policy leadership and advocacy, coaching, teachings, and publications.

A Fellow in the American College of Employee Benefit Counsel, Chair of the American Bar Association (“ABA”) International Section Life Sciences and Health Committee, Chair-Elect of the ABA TIPS Section Medicine & Law Committee, Past Chair of the ABA Managed Care & Insurance Interest Group, Scribe for the ABA JCEB Annual Agency Meeting with HHS-OCR, past chair of the ABA RPTE Employee Benefits & Other Compensation Group and current co-Chair of its Welfare Benefit Committee, Ms. Stamer is most widely recognized for her decades of pragmatic, leading-edge work, scholarship and thought leadership on health and managed care and employer benefits legal, public policy and operational concerns in the healthcare, employer benefits, and insurance and financial services industries. She speaks and publishes extensively on HIPAA and other related compliance issues.

Ms. Stamer’s work throughout her career has focused heavily on working with health care and managed care, health and other employee benefit plan, insurance and financial services and other public and private organizations and their technology, data, and other service providers and advisors domestically and internationally with legal and operational compliance and risk management, performance and workforce management, regulatory and public policy and other legal and operational concerns.

For more information about Ms. Stamer or her health industry and other experience and involvements, see www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

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This entry was posted on Thursday, March 30th, 2023 at 10:14 pm and is filed under Health Care. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.