Vermont joined the ranks of 29 other states when it enacted a state False Claims Act effective May 2015. Now this week the Vermont Attorney General announced what appears to be the first settlement under that law, for in excess of $460,000 with Keene Medical Products, a durable medical equipment supplier offers numerous services, medical devices, and medical supplies to patients.
According to the terms of the Settlement Agreement, the State accused Keene of a variety of false billings to and overpayments from the Vermont Medicaid Program, including double billing and billing for services that were not medically necessary or reasonable. Under the settlement, Keene will pay the state for its past transgressions. To help ensure that Keene complies with the law going forward, the settlement also includes a Corporate Integrity Agreement with provisions requiring an independent review of Keene’s claims for the prior two years, and up to three years following the settlement. In addition, Keene will be required to return to Vermont Medicaid any overpayment identified by those reviews and must also establish an internal compliance program designed to prevent or limit future false claims.
Vermont’s new False Claims Act (FCA) contains a qui tam or whistleblower provision that like the federal FCA and most other state FCAs enables a whistleblower to commence a FCA suit and collect a reward if the suit is successful. Like these other FCAs, it also has a provision protecting whistleblowers from retaliation. Here, it appears there was no whistleblower, probably because the Vermont FCA is so new and Keene’s misconduct largely predated the law. But going forward, whistleblowers who know about misconduct in Vermont now have a remedy. And as more and more companies doing business in Vermont adopt (voluntarily or not) internal compliance programs as Keene agreed to here, the more potential whistleblowers should become aware of the law, their employer’s obligations, and the employee’s rights and options.