ProPublica

Journalism in the Public Interest

Cancel

Troubled Health-Care Staffing Chain Settles With Government for $150 Million

Maxim Healthcare Services, Inc. had been accused of submitting false bills to federal and state health programs. An earlier ProPublica investigation found that the company had hired several nurses despite a history of problems.

.

(iStockPhoto)

One of the nation's largest health-care staffing companies has agreed to pay $150 million to settle sweeping criminal and civil fraud allegations of submitting false bills to federal and state health programs.

Maxim Healthcare Services, Inc. was accused of submitting more than $61 million in fraudulent billings to government health programs for services that were either not provided or not eligible for reimbursement, according to a press release Monday from the U.S. Department of Justice. Eight former Maxim employees, as well as the parent of a former Maxim patient, have pleaded guilty to felony charges.

A different set of problems involving Maxim came up during a ProPublica investigation into the oversight of registered nurses in 2009. We identified several nurses who were hired by the Maryland-based company despite having a record of problems.

While working for Maxim, registered nurse Orphia Wilson, for example, allegedly failed to call 911 after a child stopped breathing while under her care. He died. After the incident, Wilson lost her Florida nursing license but got a job with another Maxim office in Connecticut. There, she fell asleep, then ignored—or possibly turned off—ventilator alarms that signaled a boy in her care was not getting enough oxygen, state records show. That child died, as well.

Wilson wrote in a sworn statement to investigators later: "I am very sorry about the deaths of the babys [sic] I cared for. Believe me I went through my share of guilt."

Wilson was sentenced to jail in 2008 for reckless endangerment and hiding her Florida discipline from Connecticut.

In another instance, Maxim hired a nurse who had previously lost his license in Minnesota for stealing drugs and faced a pending action against his California license for similar allegations, according to nursing board records and interviews.

The firm also hired a nurse whose license had been previously suspended by Virginia after she was found asleep on a sofa under a blanket when she was supposed to be taking care of a 4-month-old child with multiple health problems. After testing positive for drugs on the job with Maxim, she lost her nursing license.

Such oversights in hiring were common in the temporary nurse staffing industry, we found. The articles focused on how regulators across the country did little to scrutinize troubled nurses who crossed state lines to continue working. Our earlier stories did not identify Maxim by name. We have called Maxim for comment Monday and will update this post with their response when we get it.

The main focus of the settlement, filed in U.S. District Court in New Jersey, does not involve Maxim's background checks of its nursing staff, but rather the company's billing practices. In order to conceal the fraud, the government alleged, Maxim employees falsified time sheets and covertly submitted bills for services delivered by unlicensed offices.

“Not only did Maxim fail to back up its billings with proper documentation, we found that Maxim frequently billed for services it never rendered or care it never provided,” said Tony West, assistant attorney general in charge of the Justice Department's civil division, in a statement. “And, we learned, to avoid detection, Maxim's former officers and employees engaged in a variety of tactics to conceal the company's fraud.”

Maxim agreed to pay a $20 million criminal fine and abide by terms of a deferred prosecution agreement. The company is also paying $70 million to the federal government and $60 million to 42 states to settle civil allegations.

Among the Maxim employees who have pleaded guilty is Gregory Munzel, who was regional account manager of Maxim's Charleston, S.C., office from 2001 to 2005. In his plea hearing in December 2009, Munzel acknowledged fabricating documentation to make it appear that caregivers were properly credentialed when, in fact, they were not. He said he did so in response to sales pressure from his superiors to generate more revenue. He also said such falsifications were a common practice by employees in his office.

In announcing the settlement, the government went out of its way to praise Maxim for reforming its practices, including leadership changes, a stronger corporate compliance program and cooperation with prosecutors in the case.

In a statement, Maxim CEO Brad Bennett said, “While we regret the circumstances that led to these agreements, the resulting enhancements have clearly made Maxim a better and stronger company. Most importantly, at Maxim there is now a renewed commitment to the highest standards of conduct and consistent delivery of high quality patient care.”

Update (9/13): Maxim spokeswoman Rebecca Kirkham responded via email: "Since the appointment of a new management team in 2009, Maxim has made significant investments in its infrastructure and systems -- updating and revising more than 120 policies and procedures, including its hiring and supervision practices. Today, Maxim conducts comprehensive pre-employment background checks on all employees. Our robust employee screening and hiring processes are consistent with and meet all applicable state and federal guidelines."

John Gailbraith

Sep. 12, 2011, 4:30 p.m.

What was the motivation for these activities of the company? Was it profitability? What other reasons do corporations have? Did those that profited pay, i.e., was justice done?

Robin Page West

Sep. 17, 2011, 3:23 p.m.

It was a whistleblower, a 63 year old Medicaid recipient and Vietnam veteran, who triggered this investigation with the filing of a qui tam case. He will receive a $14.8 million reward. Details of the case are at http://www.homehealthcarefraudsettlement.com .

This article is part of an ongoing investigation:
When Caregivers Harm

When Caregivers Harm: America's Unwatched Nurses

California has failed to protect patients from nurses who are incompetent and dangerous.

The Story So Far

In California, nurses accused of serious wrongdoing have often been left free to practice for years while their cases were being investigated—with patients unaware of the danger.

The board that oversees the state’s registered nurses has taken more than three years, on average, to discipline nurses with histories of drug abuse, negligence, incompetence and violence.

More »

Get Updates

Stay on top of what we’re working on by subscribing to our email digest.

optional

Our Hottest Stories

  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •  
  •