New York: Indian-origin executive to pay $750,000 to resolve fraud allegations

An Indian-origin executive by a Florida-based provider of managed care services has agreed to pay $750,000 to resolve his alleged role in an extensive fraud scheme perpetrated by the company.

Siddhartha Pagidipati, the former Chief Operating Officer (COO) of Freedom Health, has agreed to pay $750,000 to resolve his alleged role in the scheme, the Justice Department announced.

Freedom Health and its related corporate entities also agreed to pay $32.5 million to resolve allegations that they violated the 'False Claims Act' by engaging in illegal schemes to maximise their payment from the government in connection with their Medicare Advantage plans.

The government alleged that Freedom Health submitted or caused others to submit unsupported diagnosis codes to a federal health agency which resulted in inflated reimbursements from 2008 to 2013 in connection with two of their Medicare Advantage plans operating in Florida.

It also alleged that Freedom Health made material misrepresentations to the agency regarding the scope and content of its network of providers (physicians, specialists and hospitals) in its application. The government's settlement with Pagidipati resolves his alleged role in this latter scheme.

"When entering into agreements with managed care providers, the government requests information from those providers to ensure that patients are afforded the appropriate level of care," said Acting Assistant Attorney General Chad Readler of the Justice Department's Civil Division.

"Today's result sends a clear message to the managed care industry that the United States will hold managed care plan providers responsible when they fail to provide truthful information."