Naples, Fla.-based NCH Healthcare System will pay the U.S. $5.5 million to settle allegations that it made donations to the local government to improperly fund Florida's Medicaid payments to the system.
Under the federal law, Florida's share of Medicaid payments cannot include "non-bona fide donations" — or a payment from a private provider to a government entity that is returned to the provider as Medicaid payments, according to a Feb. 14 Justice Department news release. Instead, Florida's share of Medicaid payments must come from state or local government funds.
The U.S. alleged that NCH made non-bona fide donations by giving free nursing and athletic training services to the county's school board and by paying part of the county's financial obligations. These were both allegedly used to increase Medicaid payments given to NCH.
By making these alleged donations, it loosened up county and school board funds to make payments to Florida as the state share of Medicaid payments to NCH.
"States and local units of government must use their own money when seeking federal Medicaid matching funds to help ensure that Medicaid payments are determined by beneficiaries’ medical needs rather than donations by hospitals or other health care providers," said Brian Boynton, acting assistant attorney general of the Justice Department's Civil Division.
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