False Claims Act of 1863

And they're going to pay $541 million to settle Medicare Advantage fraud allegations.

So the Villages Health, a primary and specialty care provider group, has agreed to pay $541, you can't say that number often enough, $541 million to resolve allegations that it violated the False Claims Act by submitting improper Medicare Advantage diagnosis codes.

And this is according to an August 26 news release from the Justice Department.

The company which sought Chapter 11 bankruptcy protection in July of 25, so just over a year ago, was acquired by Humana's CenterWell in September.

Prosecutors said that from January 2020 through December 2024, the village's, let's see, TVH, I see TVH in one place and I see TVA in another place, the village something or other.

knowingly submitted improper diagnosis codes to Medicare Advantage insurance companies, which included UnitedHealthcare, Humana, and GuideWell, which is a parent company of Florida Blue, thereby inflating capitated payments that CMS, the United States government, made to the insurance companies.

The U.S. contended in a settlement agreement that TVH, the village's health, violated the False Claims Act by knowingly submitting improper diagnoses to Medicare Advantage organizations for, according to their estimates, $361 million in inflated payments of federal funds.

Wow, there's a lot of acronym usage here.

Perhaps the most frustrating aspect of the Doge failure is that a mechanism to cut waste and fraud already exists, and unlike Elon's chainsaw, it actually works.

The United States has a long-standing statute called the False Claims Act, which dates back to the Civil War.

It allows private citizens, known as whistleblowers, to sue companies or individuals defrauding the government and, crucially, to keep a portion of the recovered funds.

This is the eat what you kill approach to regulation, and it appeals to free market principles far more than a centralized politburo of efficiency czars.

We also looked at how 19 state AGs made statements about anti-DEI enforcement efforts in the wake of president's executive orders last year.

And then just last month in this podcast, I reviewed the IBM $17 million settlement for False Claims Act allegations, and just last week I saw there was a $25.5 million settlement with Deloitte.

So that started obviously me down the road revisiting how some companies have built their DEI programs really quickly and maybe looked at dismantling them equally quickly.

And there was a recent study that came out to take a look at whether DEI programs were or were not financially beneficial to companies.

Adam, you reminded me that just the other day there was a look at the, at the funding that was given to private schools if they were looking too much about diversity in their hiring or in their student population.

So every day almost we're starting to see momentum building.

Certainly the False Claims act actions, which maybe arguably started with the recent IBM settlement, I think are gonna be gaining momentum.

Companies have legitimate reasons to review their programs.

Now, the teeth of violating this order are real.

A knowing failure to implement a plan can be referred to the attorney general where false claims act exposure carries the risk of significant damages and suspension and disbarment are both on the table.

Now, the provision of all this that's going to have the most far-reaching impact is not even the crackdown on waivers.

By January 16th, 2027, the defense secretary has to develop guidance requiring prime contractors and subcontractors at any tier to map critical supply chains from raw materials all the way to end use products Now, just pause on that for a minute.