a5454983ex10_3.htm


    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.

      


       

      
        
           

        

        
          Final
            Page 1

          
            

          

        

        
           

        

         

      

      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.

       

      
        
           

        

        
          Final
            Page 2

          
            

          

        

        
           

        

      

       

      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.

       

      
        
           

        

        
          Final
            Page 3

          
            

          

        

        
           

        

         

      

      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.

       

      
        
           

        

        
          Final
            Page 4

          
            

          

        

        
           

        

      

       

      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.

       

      
        
           

        

        
          Final
            Page 5

          
            

          

        

        
           

        

      

       

      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.

       

      
        
           

        

        
          Final
            Page 6

          
            

          

        

        
           

        

      

       

      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.

       

      
        
           

        

        
          Final
            Page 7

          
            

          

        

        
           

        

      

       

      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

              	 
	 	 	 	 	 
	 	 	 	 	 


      

       

       

      Final
        Page
        8