Parents Accuse District of Medicaid Fraud

Sometimes a dispute over special education can blow up into something bigger.  That’s what happened in Houston ISD, culminating in a lawsuit alleging that the district was falsifying claims to Medicaid, thereby engaging in fraud.  Parents of students with disabilities alleged in the suit that the district was tailoring special education services in a way designed to maximize Medicaid billing, thereby defrauding the government.

The court tossed the suit out, dismissing it “with prejudice.” This means the plaintiffs do not have the opportunity to amend their complaint and try again.  The problem, according to the court, was that the plaintiffs did not provide enough specifics in their suit. This was a False Claims Act case (FCA), which is a whistleblower-type statute. Under the FCA a citizen who reports fraud by a government contractor, such as a school district, can file a private lawsuit.  If successful, the plaintiff can recover a portion of any money damages awarded by the court.

The FCA requires the plaintiff to be very specific about what kind of fraud was committed, who did it, how they did it, and when they did it. In this case, the plaintiffs did not name anyone specifically, provided only a broad range of dates, and failed to provide specifics as to what fraudulent Medicaid bills were submitted.  Thus the case was dismissed.

Nevertheless, this is a good reminder of the importance of careful practices with regard to Medicaid billing. This will not be the last time a district is accused of defrauding the federal government. The case is Gregory G. v. Houston ISD, decided by the federal court for the Southern District of Texas on September 30, 2016.  You can find it at 2016 WL 5661701.


File this one under: LIABILITY

Tomorrow: Toolbox Tuesday!!