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Lakeland Regional Health is repaying $4 million to the Medicaid program after it was discovered that LRH’s medical center was paying Polk County’s share of Medicaid payments in order for the hospital to receive additional federal Medicaid funds.
The U.S. Attorney’s Office in the Middle District of Florida in Tampa issued a press release describing the complicated system in which permissible payments are supposed to be made to the Medicaid program.
“The Florida Medicaid program provides medical assistance to low-income individuals and individuals with disabilities, and is jointly funded by the federal and state governments. Under federal law, Florida’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,” the release states.
It goes on to describe a kind of pass-through activity, which is improper under common law, by which LRH sent funds to Polk County, which sent the payment to the state, which then sent the money to the federal Medicaid program, making it appear as though the funds came from the state of Florida and were eligible for matching funds from the federal Medicaid program.
“Because Medicaid services are reimbursed jointly by the federal and state governments, this non-bona fide donation caused federal expenditures to increase without any corresponding increase in state expenditures,” the press release noted. “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.”
The U.S. Attorney’s Office said this activity occurred for one year beginning in October 2015. The matter was handled by Fraud Section attorneys Alison Rousseau and Jonathan Thrope, and Assistant U.S. Attorney Carolyn B. Tapie.
“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,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Medicaid expenditures should be determined by beneficiaries’ medical needs rather than by donations by private hospitals to local units of government.”
U.S. Attorney Roger B. Handberg for the Middle District of Florida said protecting the Medicaid program is crucial because millions of Floridians rely on it for their medical care and related services.
“We are committed to ensuring that government funds are used for their intended purposes and are not improperly obtained,” Handberg said.
The Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the U.S. Department of Health and Human Services Office of Inspector General, worked to resolve the case with Lakeland Regional.
Despite the irregularities, the press release states that “The claims resolved by the settlement are allegations only, and there has been no determination of liability.”
LkldNow reached out to U.S. Department of Justice press assistant Avery Lewis with several questions, including:
- Did a Lakeland Regional official ask a Polk County government official to make these payments?
- Did a Polk County government official demand that LRH make these payments?
- Who from each organization was involved in this scheme?
“Thank you for reaching out, but we will be declining to answer your questions at this time,” Lewis responded in an email.
Polk County Commission Chairman Geirge Lindsey took exception with the DOJ saying the county accepted inappropriate funds.
“While DOJ’s statement references ‘non-bona fide donations’ made to Polk County, rest assured the county received no such donations, and there are no implications of any inappropriate actions on the part of Polk County,” Lindsey said via a written statement. “The role of the county was simply to send local matching funds to the State of Florida Agency for Health Care Administration (AHCA) as required for the purpose of increasing the provision of health services for the Medicaid, uninsured and underinsured population.”
AHCA then applied both county and state matching funds to acquire federal funds that were sent directly back to Lakeland Regional Health.
“Further during the period in question, the county was audited by an outside agency that showed Polk County was compliant with Federal Laws, State Statute and local ordinances,” said Lindsey. “The Board of County Commissioners’ continues to ensure the integrity of the expenditure of taxpayer funds while providing the best possible services to our residents.”
Polk County Manager Bill Beasley also said the county did nothing wrong.
“Polk County has in no way broken any federal law and is not included in anyway a part of the DOJ/LRMC settlement,” Beasley said. “I would highly recommend that you confer with LRMC regarding the interpretational issues surrounding this matter.”
Lakeland Regional Associate Vice President for Marketing and Communication Kendra Kramer issued the following statement:
“Lakeland Regional Health has always remained committed to conducting all practices with the highest level of integrity and in accordance with all laws and legal guidance. During the investigative process, Lakeland Regional Health cooperated fully with the Department of Justice. Our organization steadfastly disputes any allegations that the arrangement in question violated the law, and the dispute is a result of a disagreement over the interpretations of a complex regulatory matter. 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.”
The incidents referred to in the Department of Justice agreement took place during a time when Elaine Thompson was LRH’s chief executive officer and Evan Jones was chief financial officer. Neither is in those positions now.
Lakeland Regional Health is a non-profit health-care provider. A 2022 Community Benefit Report from LRH shows the hospital had operating revenue in 2021 of $977.8 million, with operating income of $44.88 million.
The cost of providing charity care to indigent patients was $13.6 million. The hospital had 190,600 emergency room visits, 42,700 admissions, and nearly 19,000 surgeries. More than 279,000 visits were made to its walk-in clinics, and 6,900 people visited its Family Health Centers. The health system employs more than 6,400 people.
It is unclear how the hospital will pay the $4 million fee, but the hospital’s excess revenue over expenses was $129 million in 2021.
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