Pediatric Services of America to Pay $6.7 Million to Settle False Claims Charges

Pediatric Services of America (PSA),  the leading provider of home healthcare services for critically ill children, will pay $6.7 million to settle charges brought under the False Claims Act.

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The federal government and 17 states alleged that PSA knowingly violated federal and state law by not timely returning Medicaid overpayments after they were identified within the 60-day repayment provision under the Affordable Care Act.

The whistleblowers will share over $1.1 million as part of the settlement.

PSA also agreed to enter into a Corporate Integrity Agreement with the Department of Health and Human Services (“HHS”) as part of the settlement. PSA agreed to resolve the allegations against it without acknowledging any wrongdoing.

One of the whistleblowers, Sheila McCray, was represented by Raymond L. Moss of Moss & Gilmore in Atlanta.

McCray provided prosecutors with overwhelming evidence of the overpayments.

Early on during her tenure at PSA, McCray, a billing specialist hired as an hourly employee, discovered numerous other billing irregularities.

Moss said that despite the risk to her position, she attempted on various occasions to address these issues with her supervisors, knowing that she was required by law, to report any violations of which she is aware.

She also advised them that the unlawful actions of the defendants, including keeping and not promptly refunding overpayments from Medicare and Medicaid that the defendants and their employees were incurring significant criminal and civil liability.

Her claims also included wrongful termination and retaliation under the False Claims Act.

The other whistleblower, Yvette Odumosu, a former Director of Clinical Nursing was represented by Michika Reynolds-Quillin and Julie Bracker of Bracker & Marcus LLC.

PSA’s owner, Portfolio Logic, LLC, a Washington, D.C. based investment firm which acquired all of PSA in a going private transaction in 2007, was also named as a defendant in the whistleblower lawsuit filed by McCray.

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