Exhibit 10.3
 

 
DEFERRED PROSECUTION
 
Maximus, Inc., ("Maximus"), a Virginia corporation, by its undersigned
attorneys, pursuant to authority granted by its Board of Directors, and the
United States Attorney's Office for the District of Columbia ("the Office"),
enter into this Agreement.
 
Statement of Facts
 
1.       Maximus is a government services company that provides program
management, operations, and information technology services to State and local
governments. Maximus has more than 5,200 employees in more than 220 offices in
North America and Australia.
 
2.       The District of Columbia Child and Family Services Agency ("CFSA") is
an agency of the government of the District of Columbia. CFSA's mission is to
provide services that promote the safety and well-being of children who either
are placed into foster care or known to CFSA because they have suffered abuse
and neglect.
 
3.       Targeted Case Management ("TCM") is a means of providing specialized
case management services, such as assessment of client circumstances to identify
needed services, to a targeted population. By implementing a TCM program, a
local governmental agency, such as CFSA, can be reimbursed by the Federal
government for a portion of the costs that it incurs helping individuals obtain
access to specified social services. In the District of Columbia, the Federal
government reimburses 70% of the costs of providing covered TCM services.
 
4.       Commencing in 1999, Maximus was awarded a contract to provide program
management to CFSA. At the time that Maximus was awarded the CFSA contract, CFSA
was in court-ordered receivership under the supervision of United States
District Judge Thomas F. Hogan because Judge Hogan had determined that CFSA was
providing a constitutionally inadequate level of services to the children for
whom it was responsible.

 
 
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5.       One cause of CFSA's failure to provide adequate services to its
constituency was a chronic lack of money. To remedy this problem, Maximus'
contract with CFSA provided that Maximus would, on CFSA's behalf, "pursue and
obtain additional Title XIX Medicaid and other federal revenue for health care
and administrative costs for children and families receiving services from the
CFSA." To this end, Maximus agreed to develop "a new cost reporting protocol and
claiming methodology allowing CFSA to receive significantly enhanced Title XIX
revenue," an assessment of the billing rates CFSA was using, and modification of
the State Plan and cost allocation plan to maximize federal participation." For
its efforts, Maximus was to receive approximately 10% of all federal
reimbursement revenues that it obtained on behalf of CFSA.
 
6.       Among the financial optimization recommendations that Maximus made for
CFSA was that CFSA implement a TCM program. Maximus caused the District of
Columbia State Plan for medical assistance to be amended to authorize CFSA to
receive federal reimbursement in connection with a TCM program under which it
would provide its core services to its pre-existing constituency.
 
7.       Federal reimbursement regulations require that TCM claims for
reimbursement be supported by documentation sufficient to identify the date,
type and recipient of the service for which reimbursement is sought. Proxies for
service documentation, such as time studies and cost allocation plans, are not
sufficient to support a claim for a Medicaid service. Maximus knew of these
documentation requirements and understood that claims for reimbursement could
not be submitted without complying with these documentation requirements.
 
 
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8.       After Maximus began working on behalf of CFSA, Maximus employees
quickly determined that CFSA could not document the provision of many services
and certainly could not document that it was providing monthly TCM services to
each child for which it was responsible. Maximus knew that CFSA had insufficient
documentation of TCM claims because it had, on several occasions, reviewed
CFSA's electronic and paper files for the purpose of identifying such
documentation and concluded that the documentation was largely not present.
Nonetheless, Maximus employees, including a former company vice-president,
decided to cause CFSA to claim TCM reimbursement, on a monthly basis, for each
child who had been placed in the care of CFSA. Stated another way, Maximus
caused CFSA to request TCM reimbursement as if the files of every child in
placement indicated that each child was receiving a TCM service every month
when, as Maximus then well knew, that was not true. These placement-based claims
were submitted without regard for whether any services had been performed or
whether any services had been documented as performed. From July, 1999, through
March, 2002, Maximus submitted monthly claims for reimbursement of TCM services
for every child in placement at CFS A, regardless of whether the service had
been either performed or documented.
 
9.       Because of the decision to claim Federal reimbursement based upon
placement, Maximus caused CFSA to submit 26,863 undocumented claims for Medicaid
reimbursement. The Federal government sustained a loss of $12.15 million due to
the submission of the undocumented claims. Those claims were ultimately
withdrawn after a government audit and the prior payments to CFSA were adjusted.
 
10.     Maximus continued submitting claims based upon placement until March,
2002, when CMS conducted an audit of CFSA's TCM claims. During the audit, CMS
investigators learned that less than half of the sampled claims that Maximus had
caused CFSA to submit possessed supporting documentation. Maximus thereupon, on
behalf of CFSA, withdrew all of the claims that it previously had submitted on
behalf of CFSA. The claims were then resubmitted using the services-based
methodology.
 
 
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Acceptance of Responsibility for Submitting Undocumented Claims
 
11.      Maximus accepts and acknowledges responsibility for its behavior as set
forth in the preceding Statement of Facts by entering into this Agreement and
by, among other things, the extensive remedial actions that it has taken to
date, its continuing commitment of full cooperation with the Office and other
governmental agencies, its agreement to pay restitution and substantial monetary
fines, and the other undertakings it has made as set forth herein. Maximus
agrees that it will not contest the admissibility into evidence of the Statement
of Facts in any subsequent criminal proceedings occurring in the event of breach
of this Agreement. Maximus agrees that the foregoing Statement of Facts is true
and accurate.
 
Deferral of Prosecution
 
12.       The United States reserves the right to file an Information (the
"Information") in the United States District Cowl for the District of Columbia
charging Maximus with a violation of Title 18, United States Code, Section 1347
arising out of the Statement of Facts recited above. In consideration of
Maximus' entry into this Agreement and its commitment to (a) accept and
acknowledge responsibility for its conduct; (h) cooperate with this Office; (c)
make the payment specified in this Agreement; (d) comply with Federal criminal
laws; and (e) otherwise comply with all of the terms of this Agreement, this
Office will defer filing the Information for 24 (twenty-four) months following
the signing of this Agreement. Maximus expressly waives indictment and all
rights to a speedy trial and to a jury trial pursuant to the Sixth Amendment of
the United States Constitution, Title 18, United States Code, Section 3161,
Federal Rule of Criminal Procedure 48(b), and any applicable Local Rules of the
United States District Court for the District of Columbia for the period during
which this Agreement is in effect.
 
 
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13.           The Office agrees that, if Maximus is in compliance with all of
its obligations under this Agreement, the Office will, at the expiration of the
period of deferral (including any extensions thereof), decline to file the
Information against Maximus. Except in the event of a violation by Maximus of
any term of this Agreement, the Office will bring no additional charges against
Maximus relating to its development and implementation of a TCM reimbursement
methodology on behalf of CFSA. In the event of a violation by Maximus of any
teen of this Agreement, this Office may file the Information referred to in
paragraph 12. This Agreement does not provide any protection against prosecution
for any offenses except as set forth above and does not apply to any individual
or entity other than Maximus.
 
14.           Maximus expressly agrees that it shall not, through its present or
future attorneys, board of directors, agents, officers, or management employees,
make any public statement contradicting any statement of fact contained in the
Statement of Facts. Any such contradictory public statement by Maximus, its
present or future attorneys, board of directors, agents, officers, or management
employees shall constitute a breach of this Agreement, and Maximus would
thereafter be subject to prosecution pursuant to the terms of this Agreement.
The decision of whether any public statement by any such person contradicting a
fact contained in the Statement of Facts will be imputed to Maximus for the
purpose of determining whether Maximus has breached this Agreement shall be at
the sole reasonable discretion of the Office. Should the Office decide in its
sole reasonable discretion to no Maximus of a public statement by any such
person that in whole or in part contradicts a statement of fact contained in the
Statement of Facts, Maximus may avoid breach of the Agreement by publicly
repudiating such statement within 48 hours after such notification.
 
 
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15.           Pursuant to a civil settlement, Maximus agrees to pay
$30,500,000.00 to the United States Treasury as more fully set forth in the
Settlement Agreement dated July 20, 2007, by and among the United States of
America, acting through the United States Department of Justice and on behalf of
the Office of the Inspector General of the Department of Health and Human
Services, relator Benjamin Turner, and Maximus.
 
Revised ComplianceProgram
 
16.           Maximus has previously adopted a corporate compliance program that
sets forth the standards by which individuals employed by or associated with
Maximus will conduct themselves in order to protect and promote organizational
integrity, and to ensure compliance with Federal and state law. To strengthen
this program, Maximus will revise its compliance program accord with Section
8B2.1 of the United States Sentencing Guidelines.
 
17.           Maximus also has agreed to revise and enhance its compliance
program and to cooperate in periodic reviews of its claiming services under
Federal health care programs as set forth in the Corporate Integrity Agreement
dated July 20, 2007, between the Office of the Inspector General of the
Department of Health and Human Services and Maximus.
 
Breach of the Agreement
 
18.           In the event that the Office, in its sole reasonable discretion,
determines that Maximus has violated any provision of this Agreement, including
Maximus' failure to meet its obligations under this Agreement: (a) all
statements made by or on behalf of Maximus to the Office, including but not
limited to the Statement of Facts, or any testimony given by Maximus or by any
agent of Maximus before a grand jury, or elsewhere, whether before or after the
date of this Agreement, shall be admissible for the truth of the matter in
evidence in any and all criminal proceedings hereinafter brought by the Office
against Maximus; and (b) Maximus shall not assert any claim under the United
States Constitution, Rule of the Federal Rules of Criminal Procedure, Rule 410
of the Federal Rules of Evidence, or any other Federal rule, that statements
made by or on behalf of Maximus before or after the date of this Agreement, or
any leads derived therefrom, should be suppressed or otherwise excluded from
evidence. It is the intent of this Agreement to waive any and all rights in the
foregoing respects.
 
 
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19.         In the case of the willful and knowing material breach of this
Agreement, any prosecution of Maximus relating to the offenses described in the
Statement of Facts that are not time barred by the applicable statute of
limitations as of the date of this Agreement may be commenced against Maximus
notwithstanding the expiration of any applicable statute of limitations during
the deferred prosecution period and up to the determination of any such willful
and knowingly material breach. Maximus' waiver of the statute of limitations is
knowing and voluntary and in express reliance on the advice of counsel.
 
20.         Maximus agrees that, in the event that the Office determines during
the period of deferral of prosecution described above (or any extensions
thereof) that Maximus violated any provision of this Agreement, a one-year
extension of the period of deferral of prosecution may be imposed in the sole
reasonable discretion of the Office and, in the event of additional violations,
such additional one-year extensions as appropriate, but in no event shall the
total term of the deferral-of-prosecution period of this Agreement exceed five
years.
 
The Office'sDiscretion
 
21.         Maximus agrees that it is within the Office's sole reasonable
discretion to choose, in the event of a violation, the remedies contained above,
or instead to choose to extend the period of deferral of prosecution. Maximus
understands and agrees that the exercise of the Office's discretion under this
Agreement is un-reviewable by any court. Should the Office determine that
Maximus has violated this Agreement, the Office shall provide notice to Maximus
of that determination and provide Maximus with an opportunity to make a
presentation to the Office to demonstrate that no violation occurred, or, to the
extent applicable, that the violation should not result in the exercise of those
remedies or in an extension of the period of deferral of prosecution.
 
 
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22.           Maximus agrees that DeMaurice F. Smith of Patton Boggs, LLP, its
signatory to this Agreement, is authorized, pursuant to authority granted by its
Board of Directors, to enter into this Agreement on behalf of the company.
 
23.           This Agreement may be executed in counterparts, each of which
constitutes an original and all of which constitute one and the same Agreement.
 
 

  7-23-07   7-23-07     Date   Date               /s/ DeMaurice F. Smith   /s/
Sarah T. Chasson    
DeMaurice F. Smith
Patton Boggs, LLP
Representative for Maximus 
 
Sarah T. Chasson
Assistant United States Attorney
District of Columbia
                     

 
 
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