On February 14, 2022, the Department of Justice and U.S. Attorney’s Office for the Middle District of Florida announced they had reached a $5.5 million settlement with NCH Healthcare System (“NCH”) to resolve common law claims arising from NCH’s donations to local government entities—payments that the government alleged were used improperly to fund Florida’s share of Medicaid payments made to NCH.
NCH is a non-profit entity that operates two hospitals in Collier County, Florida. The government alleged that between October 2014 and September 2105, NCH provided free nursing and athletic training services to the Collier County School Board and paid other financial obligations on behalf of Collier County.[1] Under the government’s theory, these donations were designed to artificially increase Medicaid payments made to NCH without any corresponding expenditure of state or local funds on health care. Instead, the donations allowed the county and its local school board to avoid various expenditures, which left funds available to be paid to the State of Florida as its share of Medicaid payments owed to NCH. Under federal law, specifically 42 U.S.C. § 1396b(w)(2)(B), Florida’s share of Medicaid payments must consist of state or local government funds, and not “non-bona fide donations” from private health care providers. A non-bona fide donation triggers a corresponding federal expenditure for the federal share of Medicaid without any corresponding increase in state expenditures....
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