DEFERRED PROSECUTION
Exhibit
10.3
DEFERRED
PROSECUTION
Maximus,
Inc., ("Maximus"), a Virginia corporation, by its undersigned attorneys,
pursuant to authority granted by its Board of Directors, and the United States
Attorney's Office for the District of Columbia ("the Office"), enter into
this
Agreement.
Statement
of Facts
1. Maximus
is a government services company that provides program management, operations,
and information technology services to State and local governments. Maximus
has
more than 5,200 employees in more than 220 offices in North America and
Australia.
2. The
District of Columbia Child and Family Services Agency ("CFSA") is an agency
of
the government of the District of Columbia. CFSA's mission is to provide
services that promote the safety and well-being of children who either are
placed into xxxxxx care or known to CFSA because they have suffered abuse
and
neglect.
3. Targeted
Case Management ("TCM") is a means of providing specialized case management
services, such as assessment of client circumstances to identify needed
services, to a targeted population. By implementing a TCM program, a local
governmental agency, such as CFSA, can be reimbursed by the Federal government
for a portion of the costs that it incurs helping individuals obtain access
to
specified social services. In the District of Columbia, the Federal government
reimburses 70% of the costs of providing covered TCM services.
4. Commencing
in 1999, Maximus was awarded a contract to provide program management to
CFSA.
At the time that Maximus was awarded the CFSA contract, CFSA was in
court-ordered receivership under the supervision of United States District
Judge
Xxxxxx X. Xxxxx because Judge Xxxxx had determined that CFSA was providing
a
constitutionally inadequate level of services
to the children for whom it was responsible.
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5. One
cause of CFSA's failure to provide adequate services to its constituency
was a
chronic lack of money. To remedy this problem, Maximus' contract with CFSA
provided that Maximus would, on CFSA's behalf, "pursue and obtain additional
Title XIX Medicaid and other federal revenue for health care and administrative
costs for children and families receiving services from the CFSA." To this
end,
Maximus agreed to develop "a new cost reporting protocol and claiming
methodology allowing CFSA to receive significantly enhanced Title XIX revenue,"
an assessment of the billing rates CFSA was using, and modification
of the State Plan and cost allocation plan to maximize federal participation."
For its efforts, Maximus was to receive approximately 10% of all federal
reimbursement revenues that it obtained on behalf of CFSA.
6. Among
the financial optimization recommendations that Maximus made for CFSA was
that
CFSA implement a TCM program. Maximus caused the District of Columbia State
Plan
for medical assistance to be amended to authorize CFSA to receive federal
reimbursement in connection with a TCM program under which it would provide
its
core services to its pre-existing constituency.
7. Federal
reimbursement regulations require that TCM claims for reimbursement be supported
by documentation sufficient to identify the date, type and recipient of the
service for which reimbursement is sought. Proxies for service documentation,
such as time studies and cost allocation plans, are not sufficient to support
a
claim for a Medicaid service. Maximus knew of these documentation requirements
and understood that claims for reimbursement could not be submitted without
complying with these documentation requirements.
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8.
After Maximus began working on behalf of CFSA, Maximus employees quickly
determined that CFSA could not document the provision of many services and
certainly could not
document that it was providing monthly TCM services to each child for which
it
was responsible. Maximus knew that CFSA had insufficient documentation of
TCM
claims because it had, on several occasions, reviewed CFSA's electronic and
paper files for the purpose of identifying such documentation and concluded
that
the documentation was largely not present. Nonetheless, Maximus employees,
including a former company vice-president, decided to cause CFSA to claim
TCM
reimbursement, on a monthly basis, for each child who had been placed in
the
care of CFSA. Stated another way, Maximus caused CFSA to request TCM
reimbursement as if the files of every child in placement indicated that
each
child was receiving a TCM service every month when, as Maximus then well
knew,
that was not true. These placement-based claims were submitted without regard
for whether any services had been performed or whether any services had been
documented as performed. From July, 1999, through March, 2002, Maximus submitted
monthly claims for reimbursement of TCM services for every child in placement
at
CFS A, regardless of whether the service had been either performed or
documented.
9.
Because of the decision to claim Federal reimbursement based upon
placement, Maximus caused CFSA to submit 26,863 undocumented claims for Medicaid
reimbursement. The Federal government sustained a loss of $12.15 million
due to
the submission of the undocumented claims. Those claims were ultimately
withdrawn after a government audit and the prior payments to CFSA were
adjusted.
10. Maximus
continued submitting claims based upon placement until March, 2002, when
CMS
conducted an audit of CFSA's TCM claims. During the audit, CMS investigators
learned that less than half of the sampled claims that Maximus had caused
CFSA
to submit possessed supporting documentation. Xxxxxxx xxxxxxxxx, on behalf
of
CFSA, withdrew all of the
claims
that it previously had submitted on behalf of CFSA. The claims were then
resubmitted using the services-based methodology.
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Acceptance
of Responsibility for Submitting Undocumented Claims
11. Maximus
accepts and acknowledges responsibility for its behavior as set forth in
the
preceding Statement of Facts by entering into this Agreement and by, among
other
things, the extensive remedial actions that it has taken to date, its continuing
commitment of full cooperation with the Office and other governmental agencies,
its agreement to pay restitution and substantial monetary fines, and the
other
undertakings it has made as set forth herein. Maximus agrees that it will
not contest the admissibility into evidence of the Statement of Facts
in
any subsequent criminal proceedings occurring in the event of breach of this
Agreement. Maximus agrees that the foregoing Statement of Facts is true and
accurate.
Deferral
of Prosecution
12. The
United States reserves the right to file an Information (the "Information")
in
the United States District Cowl for the District of Columbia charging Maximus
with a violation of Title 18, United States Code, Section 1347 arising out
of
the Statement of Facts recited above. In consideration
of Maximus' entry into this Agreement and its commitment to (a) accept and
acknowledge responsibility for its conduct; (h) cooperate with this Office;
(c)
make the payment specified in this Agreement; (d) comply with Federal criminal
laws; and (e) otherwise comply with all of the terms of this Agreement, this
Office will defer filing the Information for 24 (twenty-four) months following
the signing of this Agreement. Maximus expressly waives indictment and all
rights to a speedy trial and to a jury trial pursuant to the Sixth Amendment
of
the United States Constitution, Title 18, United States Code, Section 3161,
Federal Rule of Criminal
Procedure 48(b), and any applicable Local Rules of the United States District
Court for the District of Columbia for the period during which this Agreement
is
in effect.
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13. The
Office agrees that, if Maximus is in compliance with all of its obligations
under this Agreement, the Office will, at the expiration of the period of
deferral (including any extensions thereof), decline to file the Information
against Maximus. Except in the event of a violation by Maximus of any term
of
this Agreement, the Office will bring no additional charges against Maximus
relating to its development and implementation of a TCM reimbursement
methodology on behalf of CFSA. In the event of a violation by Maximus of
any
teen of this Agreement, this Office may file the Information referred to
in
paragraph 12. This Agreement does not provide any protection against prosecution
for any offenses except as set forth above and does not apply to any individual
or entity other than Maximus.
14. Maximus
expressly agrees that it shall not, through its present or future attorneys,
board of directors, agents, officers, or management employees, make any public
statement contradicting any statement of fact contained in the Statement
of
Facts. Any such contradictory public statement by Maximus, its present or
future
attorneys, board of directors, agents, officers, or management employees
shall
constitute a breach of this Agreement, and Maximus would thereafter be subject
to prosecution pursuant to the terms of this Agreement. The decision of whether
any public statement by any such person contradicting a fact contained in
the
Statement of Facts will be imputed to Maximus for the purpose of determining
whether Maximus has breached this Agreement shall be at the sole reasonable
discretion of the Office. Should the Office decide in its sole reasonable
discretion to no Maximus of a public statement by any such person that in
whole
or in part contradicts a statement of fact contained in the Statement of
Facts,
Maximus may avoid breach of the Agreement by publicly repudiating such statement
within 48 hours after such notification.
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15. Pursuant
to a civil settlement, Maximus agrees to pay $30,500,000.00 to the United
States
Treasury as more fully set forth in the Settlement Agreement dated July 20,
2007, by and among the United States of America, acting through the United
States Department of Justice and on behalf of the Office of the Inspector
General of the Department of Health and Human Services, relator Xxxxxxxx
Xxxxxx,
and Xxxxxxx.
Revised
ComplianceProgram
16. Maximus
has previously adopted a corporate compliance program that sets forth the
standards by which individuals employed by or associated with Maximus will
conduct themselves in order to protect and promote organizational integrity,
and
to ensure compliance with Federal and state law. To strengthen this program,
Maximus will revise its compliance program accord with Section 8B2.1 of the
United States Sentencing Guidelines.
17. Maximus
also has agreed to revise and enhance its compliance program and to
cooperate in periodic reviews of its claiming services under Federal health
care
programs as set forth in the Corporate Integrity Agreement dated July 20,
2007,
between the Office of the Inspector General of the Department of Health and
Human Services and Maximus.
Breach
of the Agreement
18. In
the event that the Office, in its sole reasonable discretion, determines
that
Maximus has violated any provision of this Agreement, including Maximus'
failure
to meet its obligations under this Agreement: (a) all statements made by
or on
behalf of Maximus to the Office, including but not limited to the Statement
of
Facts, or any testimony given by Maximus or by any agent of Maximus before
a
grand jury, or elsewhere, whether before or after the date of this
Agreement, shall be admissible for the truth of the matter in evidence in
any
and all criminal proceedings hereinafter brought by the Office against Maximus;
and (b) Maximus shall not assert any claim under the United States Constitution,
Rule of the Federal Rules of Criminal Procedure, Rule 410 of the Federal
Rules
of Evidence, or any other Federal rule, that statements made by or on behalf
of
Maximus before or after the date of this Agreement, or any leads derived
therefrom, should be suppressed or otherwise excluded from evidence. It is
the
intent of this Agreement to waive any and all rights in the foregoing
respects.
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19. In
the case of the willful and knowing material breach of this Agreement, any
prosecution of Maximus relating to the offenses described in the Statement
of
Facts that are not time barred by the applicable statute of limitations as
of
the date of this Agreement may be commenced against Maximus notwithstanding the
expiration of any applicable statute of limitations during the deferred
prosecution period and up to the determination of any such willful and knowingly
material breach. Maximus' waiver of the statute of limitations is knowing
and
voluntary and in express reliance on the advice of counsel.
20. Maximus
agrees that, in the event that the Office determines during the period of
deferral of prosecution described above (or any extensions thereof) that
Maximus
violated any provision of this Agreement, a one-year extension of the period
of
deferral of prosecution may be imposed in the sole reasonable discretion
of the
Office and, in the event of additional violations, such additional one-year
extensions as appropriate, but in no event shall the total term of the
deferral-of-prosecution period of this Agreement exceed five years.
The
Office'sDiscretion
21. Maximus
agrees that it is within the Office's sole reasonable discretion to choose,
in
the event of a violation, the remedies contained above, or instead to choose
to
extend the period of
deferral of prosecution. Maximus understands and agrees that the exercise
of the
Office's discretion under this Agreement is un-reviewable by any court. Should
the Office determine that Maximus has violated this Agreement, the Office
shall
provide notice to Maximus of that determination and provide Maximus with
an
opportunity to make a presentation to the Office to demonstrate that no
violation occurred, or, to the extent applicable, that the violation should
not
result in the exercise of those remedies or in an extension of the period
of
deferral of prosecution.
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22. Maximus
agrees that DeMaurice X. Xxxxx of Xxxxxx Xxxxx, LLP, its signatory to this
Agreement, is authorized, pursuant to authority granted by its Board of
Directors, to enter into this Agreement on behalf of the company.
23. This
Agreement may be executed in counterparts, each of which constitutes an original
and all of which constitute one and the same Agreement.
| 7-23-07 | 7-23-07 | |||
| Date | Date | |||
| /s/ DeMaurice X. Xxxxx | /s/ Xxxxx X. Xxxxxxx | |||
|
DeMaurice
X. Xxxxx
Xxxxxx
Xxxxx, LLP
Representative
for Xxxxxxx
|
Xxxxx
X. Xxxxxxx
Assistant
United States Attorney
District
of Columbia
|
|||
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