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Justice News

Department of Justice
U.S. Attorney’s Office
Middle District of Alabama

FOR IMMEDIATE RELEASE
Friday, July 23, 2021

Spectracare Health Systems, Inc. Agrees To Pay $1 Million

            Montgomery, Alabama – On July 23, 2021, a notice of dismissal was filed indicating that SpectraCare Health Systems, Inc. (“SpectraCare”) agreed to pay $1 million dollars to resolve a federal qui tam lawsuit alleging that it violated the False Claims Act, announced Acting United States Attorney Sandra J. Stewart.  The Government’s multi-year investigation, which spawned from a whistleblower complaint, investigated whether SpectraCare knowingly violated the False Claims Act by improperly billing Alabama Medicaid for Basic Living Skills services, and by failing to return overpayments to the Alabama Medicaid Agency, which constitutes a “reverse false claim” actionable under 3729(a)(1)(G) of the False Claims Act. 

            SpectraCare Health Systems, Inc. is a 501(c)(3) nonprofit organization headquartered in Dothan, Alabama, which provides integrated healthcare services, including developmental disability services, intermediate care medical services, behavioral health services, and preventative programs to a range of patients.  The company is contracted by the Alabama Department of Mental Health to provide services, which are paid for by the Alabama Medicaid Agency.

            This lawsuit was initially filed in the United States District Court for the Middle District of Alabama by a former SpectraCare employee under the qui tam, or whistleblower, provisions of the False Claims Act.  Pursuant to these provisions, a private citizen can bring suit on behalf of the United States and share in any recovery.  The United States will receive $743,193.00 of the $1 million dollar settlement, 19% of which will go to the relator as her share of the Government’s recovery in the matter.  The remaining $256,807.00 will be paid to the Alabama Medicaid Agency.

            The settlement resolves allegations that, from October 1, 2012 through December 31, 2019, SpectraCare (1) knowingly submitted to Medicaid claims for reimbursement for services that were billed without complete and correct documentation, billed in duplicate, over-billed, or otherwise improperly billed, and/or (2) knowingly made, used, or caused to be made or used, false records or statements material to SpectraCare’s obligation to return overpayments to Medicaid based on such improper billing procedures, and/or (3) knowingly, intentionally, or recklessly failed to repay, or to exercise reasonable diligence to determine whether it was obligated to repay, Medicaid for SpectraCare’s improper claim submissions and their attendant overpayments.

            This Affirmative Civil Enforcement matter was handled by Assistant United States Attorney Samantha R. Miller and the Civil Health Care Fraud Investigator of the United States Attorney’s Office, with assistance from Assistant Attorney General James Hartin of the Office of the General Counsel for the Alabama Medicaid Agency.  The case was investigated in conjunction with the Office of Inspector General for the United States Department of Health and Human Services.  The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Topic(s): 
Financial Fraud
Health Care Fraud
Component(s): 
Updated July 23, 2021