by Ben Vernia | November 15th, 2022
On November 14, the Department of Justice announced that the Florida Birth-Related Neurological Injury Compensation Plan has agreed to pay $51 million to settle allegations that the program violated the False Claims Act by submitting claims for payment to Medicaid that it was obligated to pay itself. According to DOJ’s press release:
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The Florida Birth-Related Neurological Injury Compensation Plan and its administrator, the Florida Birth-Related Neurological Injury Compensation Association (collectively, “NICA”), have agreed to pay $51 million to resolve allegations that they violated the False Claims Act by causing NICA participants to submit their healthcare claims to Medicaid rather than NICA, in violation of Medicaid’s status as the payer of last resort under federal law.
The civil settlement resolves a lawsuit filed and pursued by Veronica N. Arven and the estate of Theodore Arven III against NICA under the qui tam or whistleblower provisions of the False Claims Act, which permit a private party (known as a relator) to file a lawsuit on behalf of the United States and receive a portion of any recovery. Although the United States did not intervene in this case, it continued to investigate the whistleblowers’ allegations, provided substantial assistance to the whistleblowers in defending against a motion to dismiss, and negotiated the settlement announced today. The Arvens will receive $12,750,000 as their share of the recovery in this case.
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The Florida Legislature established NICA in 1988 as an alternative to the traditional tort system. NICA was intended to provide compensation, on a no-fault basis, for the medical, rehabilitative and custodial care of children who suffered certain categories of birth-related neurological injuries. Under Florida law, once a child is admitted into NICA’s program, NICA is responsible for the payment of medical and other expenses incurred because of a birth-related neurological injury. Medicaid is a joint federal-state healthcare program that provides coverage and benefits to low-income and disabled individuals. Under federal law, Medicaid is generally the payer of last resort.
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DOJ initially declined to intervene in the case after District Judge William P. Dimitrouleas refused to extend the government’s investigative period further. The program then moved to dismiss the case on the grounds that, as a state entity, under the Eleventh Amendment it was immune from suit by a whistleblower. The program lost that argument at the District Court and on Appeal (in United States v. Fla. Birth-Related Neurological Inj. Comp. Ass’n, No. 20-13448, 2022 WL 1180142 (11th Cir. Apr. 21, 2022)). The parties settled the case shortly after its return to the District Court.
The government announced that the relator will receive $12,750,000 of the settlement (a 25% relator’s share — the minimum in cases in which the government has declined to intervene).
