(Excerpts from The Free Press)

• On Wednesday, BayCare Health System Inc. and entities that operate four affiliated Florida hospitals, have agreed to pay the United States $20 million to resolve allegations that BayCare violated the False Claims Act by making donations to the Juvenile Welfare Board of Pinellas County (JWB) to improperly fund the state’s share of Medicaid payments to BayCare.
• Under federal law, 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, such as hospitals. A non-bona fide donation is a payment, in cash or in-kind, from a private provider to a governmental entity that is then returned to the private provider as the state share of Medicaid.
• The private provider’s donation triggers a corresponding federal expenditure for the federal share of Medicaid, which is also paid to the private provider. This unlawful conduct causes federal expenditures to increase without any corresponding increase in state expenditures, since the state share of the Medicaid payments to the provider comes from and is returned to the provider. The prohibition of this practice ensures that states are in fact paying a share of Medicaid payments and thus have an incentive to curb Medicaid costs and prevent unnecessary services. 
• The United States alleged that between October 2013 and September 2015, BayCare knowingly caused false claims for federal Medicaid matching funds to be submitted to the United States. Specifically, the United States alleged that during this time, BayCare made improper, non-bona fide cash donations to JWB knowing that JWB would and then did transfer a portion of the cash donations to the State of Florida’s Agency for Health Care Administration for Florida’s Medicaid Program.
• The funds transferred by JWB to the state were “matched” by the federal government before being returned to the BayCare hospitals as Medicaid payments, and BayCare was thus able to recoup its original donations to JWB and also receive federal matching funds, in violation of the federal prohibition on non-bona fide donations.