NEWARK, N.J. – One of the nation’s leading providers of home health services has agreed to a nine-figure settlement to resolve criminal and civil charges stemming from a nationwide scheme to defraud Medicaid programs and the national Veterans Affairs program of more than $61 million, federal officials announced this week.

Maxim Healthcare Services Inc., a privately held company based in Columbia, Md., was charged in a criminal complaint with conspiracy to commit healthcare fraud, according to the investigation. Maxim entered into a deferred prosecution agreement with the U.S. Department of Justice, a move that will allow the company to avoid a conviction as long as certain conditions are met.

Maxim has agreed to pay a criminal penalty of $20 million and to pay approximately $130 million in civil settlements in the matter, sums that are expected to settle federal False Claims Act claims, authorities said. According to the investigation, to date nine individuals – eight former Maxim employees, including three senior managers, and the parent of a former Maxim patient – have pleaded guilty to felony charges arising out of the submission of fraudulent billings to government healthcare programs, the creation of fraudulent documentation associated with government program billings and false statements made to government healthcare program officials regarding Maxim’s activities.

The criminal complaint accuses Maxim of submitting fraudulent billings to government healthcare programs for services not rendered or services that otherwise were not reimbursable. The investigation revealed that the submission of false bills to government healthcare programs was a common practice at Maxim from 2003 through 2009, officials said. During that time period, Maxim received more than $2 billion in reimbursements from government healthcare programs in 43 states based on billings submitted by Maxim.

“Maxim, including senior executives, defrauded a system providing needed services to turn money meant for patient care into corporate profits,” said J. Gilmore Childers, acting U.S. Attorney for the District of New Jersey. “We will continue to prove our commitment to investigating and prosecuting both companies and individuals whose misconduct robs our nation’s healthcare programs and those who count on them. It is our hope that Maxim, in cleaning up its own house, will be a lighthouse influencing best practices across the industry.”

“Fraudulent billing for services not rendered uses patients as pawns in a game of corporate greed that puts cash over care and wastes precious taxpayer dollars,” added Tony West, assistant attorney general for the Civil Division of the U.S. Department of Justice. “At a time when we're all looking for ways to reduce public expenditures, settlements like this one recapture taxpayer dollars lost to fraud and abuse, and help ensure that funds are available for the vital healthcare programs and services that people depend on day in and day out.”

As part of the settlement, Maxim has stipulated to a statement of facts that mirrors the language of the criminal complaint, authorities said. In the event that Maxim fails to comply with the provisions of the agreement, the company reportedly has agreed that investigators may proceed with its prosecution of Maxim and use the agreed-upon statement of facts against it in the prosecution.

In order to conceal the fraud outlined in the complaint, Maxim’s former officers and employees engaged in various forms of criminal conduct, including creating or modifying time sheets to support billings to government healthcare programs for services not rendered, officials said. According to the investigation, they also submitted billings through licensed offices for care actually supervised by offices that operated without licenses and whose existence was concealed from government healthcare program auditors and investigators.

Additionally, they created or modified documentation relating to required administrative functions associated with billings submitted to government healthcare programs, including documentation reflecting required training and qualifications of caregivers, investigators revealed.

The settlement agreement obliges Maxim to continue cooperating in the government’s ongoing federal and state criminal investigations of former company executives and employees responsible for the alleged conduct at issue, and to develop and operate an effective corporate compliance and governance program that includes adequate internal controls to prevent the recurrence of any improper or illegal activities, officials said. The settlement also requires Maxim’s acceptance and acknowledgment of full responsibility for the conduct that led to the government’s investigation.

The settlement ultimately is expected to resolve allegations that Maxim billed for services that were not rendered, services that were not properly documented and services performed by a total of 13 unlicensed offices, according to the investigation. The company’s settlement payment will be broken down with approximately $70 million going to the federal government and approximately $60 million going to 42 states, authorities said.