Medical Services Co. to Pay $8 Million in COVID-19 Uninsured Program False Claims Settlement

Federal officials allege Vault billed the government for pandemic-related services provided to insured patients, violating the False Claims Act.

Vault Medical Services, P.A. and Vault Medical Services of New Jersey, P.C., collectively referred to as Vault, have agreed to pay $8 million to resolve allegations of submitting false claims for reimbursement to a federal COVID-19 relief program, U.S. Attorney Alina Habba announced this week.

The settlement addresses claims that Vault knowingly billed the Health Resources & Services Administration’s COVID-19 Uninsured Program for services rendered to patients who were, in fact, insured. The Uninsured Program, which operated between May 2020 and April 2022, was designed to reimburse healthcare providers for COVID-19 testing, treatment, and vaccine services offered to individuals without health insurance.

Vault, which provided these services nationwide via telehealth and in-person testing sites, is alleged to have failed in collecting or verifying accurate insurance information from patients. According to the government’s allegations, Vault continued submitting claims to the Uninsured Program even when they had verifiable insurance data on file, including confirmation through an insurance verification process.

“The Uninsured Program provided critical support for testing and treatment for uninsured Americans during the height of the pandemic. Our office will not tolerate the alleged fraud, abuse, and waste of these funds.” - U.S. Attorney Alina Habba

The United States asserts that Vault was aware of problems with the integrity of patient information collected at the point of service but did not take adequate steps to rectify the issue. This conduct, federal officials allege, resulted in the submission of claims on behalf of patients who should not have qualified for Uninsured Program reimbursement.

The matter was investigated through a coordinated effort by the U.S. Attorney’s Office for the District of New Jersey and the Department of Justice’s Civil Division, Commercial Litigation Branch, Fraud Section, with support from the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).

Assistant U.S. Attorney Kruti Dharia of the Opioid Abuse Prevention and Enforcement Unit, along with Trial Attorneys Lindsay DeFrancesco, Elizabeth J. Kappakas, and James Nealon of the DOJ’s Civil Division, represented the government in this case.

While Vault has agreed to the $8 million settlement, the resolution includes no admission of liability. The allegations resolved by the settlement remain just that—allegations.

“Individuals and entities that participate in the federal healthcare system are required by law to preserve the integrity of program funds,” stated Special Agent in Charge Naomi Gruchacz with the U.S. Department of Health and Human Services Office of Inspector General. “The settlement in this case involves a provider that knowingly sought reimbursement for federal funds to which they were not entitled, and by doing so jeopardized the provision of services for the uninsured.”

The False Claims Act remains one of the federal government’s most effective tools for identifying and addressing healthcare fraud. The public is encouraged to report suspected fraud, waste, or abuse involving federal healthcare programs by calling the HHS tip line at 1-800-HHS-TIPS (800-447-8477).