On June 17, the DOJ announced that two consulting companies, Guidehouse Inc. and Nan McKay and Associates, agreed to pay $7.6 million and $3.7 million to resolve allegations that they violated the FCA by failing to comply with cybersecurity requirements in federally funded contracts.
Guidehouse and Nan McKay were contracted by New York’s Office of Temporary and Disability Assistance to administer the state’s emergency rental assistance program (ERAP), a federal program that provided federal funds “to eligible low-income households to cover the costs of rent, rental arrears, utilities and other housing-related expenses during the COVID-19 pandemic.”
According to the government, “Guidehouse and Nan McKay admitted that neither satisfied their obligation to complete the required pre-production cybersecurity testing.”
The settlement stems from a qui tam whistleblower suit filed by Elevation 33 LLC, owned by a former Guidehouse employee. The suit alleged that Guidehouse failed to complete the required testing. Elevation will receive nearly $2 million as its share of the recovery.
$12 Million Settlement with CityMD for Allegedly Submitting False Claims to the COVID-19 Uninsured Program
On June 7, the DOJ announced that CityMD, which manages and operates approximately 177 urgent care practices in New Jersey and New York, agreed to pay $12 million to settle allegations that it submitted false claims to the Health Resources and Services Administration’s (HRSA) COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured Program.
According to the government, “from Feb. 4, 2020, through April 5, 2022, CityMD knowingly submitted or caused to be submitted false claims for payment for COVID-19 testing to the Uninsured Program for individuals who had health insurance coverage when CityMD administered those tests. The United States contends that CityMD did not adequately confirm whether those individuals had health insurance coverage before submitting their claims to the Uninsured Program, including but not limited to certain individuals for whom CityMD had health insurance cards on file.”
The settlement resolves allegations brought forward in a qui tam whistleblower suit filed by Stephen Kitzinger, a patient of CityMD. Kitzinger will receive $2,046,308 as his share of the recovery.
Conclusion
As these settlements demonstrate, qui tam lawsuits are crucial to the effective enforcement of the False Claims Act. The significant monetary recoveries and the deterrent effect of these settlements underscore the importance of qui tam provisions in uncovering and prosecuting fraud. In the 2023 Fiscal Year, the DOJ recovered a total of $2.68 billion from FCA settlements and judgments, more than $2.3 billion of which stemmed from qui tam whistleblower suits.
Furthermore, these settlements show two areas where the DOJ has been increasing its enforcement efforts: cybersecurity and COVID-19 fraud. In 2021, the DOJ launched Task Forces and Initiatives focused on these areas.
This post was originally published on 3rd party site mentioned in the title of this site
