Grenada County to pay $1.1 million to settle fraud charge

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Grenada County will pay $1.1 million to the federal government to settle Medicare fraud claims brought against the former Grenada Lakes Medical Center and more than twenty other hospitals across the country.

This settlement, announced last week, resolves claims that the formerly county-owned hospital and one of its providers, Allegiance Health Management Company, submitted claims for therapies that were neither medically reasonable or necessary. Those therapies included activities like watching television and playing games.

The false claims were allegedly submitted between 2005 and 2013, before what was then known as the Grenada Lakes Medical Center partnered with the University of Mississippi Medical Center in 2014. The hospital is currently known as UMMC Grenada.

Although Allegiance was technically responsible for providing the disputed therapies, Grenada County, which had owned the hospital, and all of the other hospitals which have settled with the Department of Justice are responsible for paying restitution because they submitted the claims for reimbursement to Medicare.

“Hospitals that participate in the Medicare program are responsible for ensuring that the services performed at their facilities or on their behalf reflect the medical needs of patients rather than the desire to maximize profit,” said Chad A. Readler, acting assistant attorney general for the Civil Division. “The Department of Justice will continue to hold accountable those who misspend taxpayer funds by providing medically inappropriate services.”

The settlement with GLMC resolves certain allegations in a lawsuit filed in federal district court in Arkansas under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.

The whistleblower in this case is Ryan Ladner, who had worked for Allegiance as a Program Manager at the Inspirations Outpatient Counseling Center in Hattiesburg. Mr. Ladner will receive approximately $195,000 as his share of the Grenada settlement.