On February 1, 2011, the U.S. Department of Justice announced that it has entered into an agreement with Caresource to resolve allegations that the managed care plan violated the False Claims Act by submitting false information to the state of Ohio in order to defraud the Ohio Medicaid system. More specifically, Caresource provides managed care benefits on behalf of Ohio Medicaid beneficiaries. The Government alleged that the company failed to provide required screening, assessment, and case management for adults and children with special healthcare needs. Caresource then submitted false data to the state of Ohio that made it appear as though the company was providing the required services in order to retain incentives from Ohio Medicare and to avoid penalties. As a result, Caresource received millions of dollars of Medicare funds to which it was not entitled.
The qui tam lawsuit was brought on behalf of the Government by two former employees. As a reward for disclosing the fraud to the Government, the whistleblowers will receive a $3.1 million share of the settlement.