The Department of Defense (DOD) provides various health care programs for uniformed services personnel, retirees, and their families. Among these, the Uniformed Services Family Health Plan (USFHP) stands out as a significant option. Recently, the USFHP has been under scrutiny due to allegations of fraudulent activities, highlighting the importance of understanding how this department od defense dod health care program for uniformed operates and is regulated.
What is the Uniformed Services Family Health Plan (USFHP)?
The USFHP is a healthcare program offered by the DOD to military personnel, retirees, and their families as an alternative to TRICARE Prime and TRICARE Select. It’s designed to provide comprehensive healthcare services through a network of community-based, not-for-profit healthcare systems. Six health plans are currently authorized to administer the USFHP, each operating within specific service areas:
- Brighton Marine Health Center
- CHRISTUS Health Services
- Johns Hopkins Medical Services Corporation
- Martin’s Point Health Care
- Pacific Medical Center
- St. Vincent’s Catholic Medical Centers of New York
These plans contract with the DOD to deliver healthcare to USFHP enrollees, receiving capitated payments – a fixed amount per enrollee – to manage their healthcare needs. This capitated system is intended to provide predictable costs for the government and incentivize health plans to manage care efficiently.
Allegations of False Claims and Inflated Payments within the USFHP
Despite its important role in providing healthcare, the USFHP has faced challenges related to financial oversight. In a recent legal case, the U.S. government filed a complaint alleging that the six health plans participating in the USFHP, along with their trade association, the US Family Health Plan Alliance, violated the False Claims Act. The core of the allegation is that these plans knowingly retained inflated payments for healthcare services.
The government contends that in June 2012, these health plans became aware of errors in the calculation of their capitated rates, leading to overpayments in previous years. Instead of reporting and returning these overpayments, the complaint alleges that the plans concealed this information from the government. Furthermore, they continued to invoice the DOD at the inflated rates. In some instances, during rate negotiations for subsequent years, some plans reportedly even requested to maintain the inflated rates, despite knowing about the calculation errors.
These actions, according to the Department of Justice, constitute a violation of the False Claims Act, which is designed to protect the government from fraud. Principal Deputy Assistant Attorney General Brian M. Boynton emphasized the obligation of contractors to return overpayments and the commitment of the Justice Department to ensure that taxpayer funds are used appropriately for military healthcare.
The Role of Whistleblowers and the False Claims Act
The legal action against the USFHP plans was initiated through a qui tam lawsuit, a provision within the False Claims Act that allows private individuals, known as whistleblowers, to file lawsuits on behalf of the government when they have information about fraud. In this case, Jane Rollinson, a former Interim Chief Financial Officer at Martin’s Point Health Care, and Daniel Gregorie, a former consultant and board member at the same organization, brought the initial lawsuit.
Whistleblowers like Rollinson and Gregorie play a crucial role in uncovering fraud against the government. The False Claims Act incentivizes individuals with inside knowledge of fraudulent activities to come forward by offering them a percentage of any recovered funds. The government then has the option to intervene in these lawsuits, as it did in the USFHP case, lending its resources and legal authority to the prosecution.
Settlement with Kennell & Associates Inc.
In addition to the lawsuit against the health plans, the Department of Justice also reached a settlement with Kennell & Associates Inc., a consulting firm that provided actuarial services to the Defense Health Agency (DHA) in connection with the USFHP program. Kennell & Associates was responsible for advising DHA on setting the capitated rates paid to the health plans.
The settlement with Kennell & Associates resolves allegations that the firm failed to notify DHA about the errors in the rate-setting methodology that led to the inflated payments. Under the settlement, Kennell & Associates agreed to pay the United States $779,951, plus interest, and potential future payments based on their financial performance. This settlement highlights the accountability of not only the health plans but also the contractors involved in administering the department od defense dod health care program for uniformed.
Ongoing Efforts to Combat Healthcare Fraud
The USFHP case and the settlement with Kennell & Associates underscore the government’s commitment to combating healthcare fraud, particularly within programs serving military personnel and their families. The False Claims Act remains a vital tool in these efforts. The Department of Health and Human Services encourages individuals to report any suspected fraud, waste, abuse, or mismanagement within healthcare programs.
This case serves as a reminder of the complexities and potential vulnerabilities within large healthcare programs like the department od defense dod health care program for uniformed. It also highlights the importance of oversight, transparency, and the role of whistleblowers in ensuring the integrity of these critical programs and protecting taxpayer funds.
Disclaimer: The claims in the complaint and settlement agreement are allegations only. There has been no determination of liability.
