Consulting Company Pays More Than $450K to Settle Overbilling Allegations

David X. Sullivan, United States Attorney for the District of Connecticut, today announced that MERCER (US), LLC, a consulting company with an office in Hartford, has entered into a civil settlement agreement and paid more than $450,000 to resolve allegations that it overbilled the Defense Health Agency for work performed by certain employees and subcontractors billed at rates higher than their educational backgrounds or experience levels permitted.

The Defense Health Agency (“DHA”) manages TRICARE’s health benefits program for servicemembers and their families.  Prior to developing and implementing DHA’s supporting managed care support and pharmacy services contracts, DHA sought subject matter expertise from outside of the Department of Defense to ensure beneficiaries receive high quality care.  Specifically, DHA competitively sought offers for Health Plan Innovative Support (“HPIS”) services from vendors under the General Services Administration’s (“GSA”) Professional Services Schedule (“PSS”).

In approximately April 2020, DHA and Mercer entered into a Blanket Purchase Agreement (“BPA”) for HPIS services.  DHA also awarded HPIS Task 1 to Mercer.  Under this task order, Mercer would provide qualified personnel with subject matter expertise relevant to the design of TRICARE programs.  The BPA included labor categories that identified the education and experience qualifications, and associated hourly billing rate, for the personnel working under the BPA.  Each month, Mercer invoiced DHA for labor expended under the BPA at hourly billing rates commensurate to the employees’ (or subcontractor employees’) designated labor categories and the education and experience associated with those labor categories.

The government contends that, from May 7, 2020, through August 2, 2023, Mercer billed DHA for the efforts of 11 employees working under the BPA at labor rates for which those employees did not have the requisite educational background or experience levels.  Mercer investigated and disclosed to the government these incorrect contract billings.  To resolve claims arising under the Contract Disputes Act and the common law theories of breach of contract, payment by mistake, and unjust enrichment, Mercer paid the government $456,796.50.

This investigation was conducted by the Defense Criminal Investigative Service with assistance from the Defense Contract Audit Agency Operations Investigative Support Division.  This matter was handled by Assistant U.S. Attorney Sarah Gruber.