IT giant CSC coughs up $2m after helping New York City bill Medicaid for child therapy rather than insurance cos

Biz and city officials 'frequently ignored' invoice rules, prosecutors said

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An IT provider has settled with the US government regarding a row over medical billing in New York City.

Computer Sciences Corporation (CSC) agreed to a deal [PDF] that ends legal action over its role in a major Medicaid healthcare-billing case that dates back to the late 2000s and early 2010s. CSC, now part of DXC, was at the time providing IT services to the NYC's Department of Health.

Federal prosecutors said CSC knowingly aided city health officials in securing Medicaid funding for providing child health services when they should have billed private health insurance. This resulted in taxpayers bankrolling services that should have been covered by insurance companies.

"Medicaid covers vitally needed medical care for millions of people in New York," said acting US attorney Audrey Strauss this week. "Compliance with billing requirements ensures the financial integrity of the Medicaid program."

For those outside America, Medicaid is a government program that aims to cover medical costs for those without the financial means and health plans. The services in question – so-called early intervention program, or EIP, services – included things like speech and physical therapy, which health insurance plans would normally cover.

Here's what the prosecutors alleged:

The City was responsible for paying for EIP services for young children in New York City and then was permitted to seek reimbursement from private insurers, Medicaid, and other funding sources. In 2007, the City retained CSC as its billing agent to submit EIP reimbursement claims.

Although the City and CSC knew that Medicaid rules required them to take reasonable measures to obtain private insurance coverage before submitting EIP claims to Medicaid, they frequently ignored that billing requirement. For example, although the City knew that it received no response from private insurers for many EIP claims, the City and CSC failed to contact those insurers in a significant number of cases to follow up on the claims and determine the reason for the lack of a response. Instead, the City instructed CSC to treat those claims as having been denied by the private insurers and submit them to Medicaid using a code – known as “0Fill” – to indicate there was in fact no private insurance coverage.

Essentially, CSC has admitted it and city officials, according to the prosecution, "discussed a plan to develop a procedure for designating claims as 'denied' in CSC’s internal EIP database once those claims had been pending with private insurers for 90 days without an adjudication," and as such, the city "received payments from Medicaid for EIP services that Medicaid would not otherwise have made pursuant to its payment regulations and procedures."

CSC agreed to cough up $1.85m to be divided between the state and federal government: $860,435 to Uncle Sam, while the remaining $989,565 will be directed to New York state. CSC also agreed to fully cooperate with any further investigations in the case.

"We are proud to have partnered with the City of New York on this very worthwhile early intervention program from 2008 to 2014," a DXC spokesperson said of the settlement. "There were no allegations that CSC improperly received any amounts from Medicaid or that any services or payments to providers were inappropriate. We are pleased to have this matter resolved." ®

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