Atlanta-based Crawford & Company announced that its wholly-owned subsidiary, Crawford Healthcare Management of Norfolk and Baltimore, Inc. (“CHM”), has signed an agreement with the Department of Justice (“DOJ”) to resolve, subject to certain conditions, the criminal liability of CHM and the company relating to the DOJ’s investigation of the company’s billing practices in its claims management and healthcare management services divisions. This agreement would reportedly end this criminal investigation of the billing practices of CHM and the company.
CHM is a newly formed subsidiary which owns the assets and operations of two former Crawford & Company healthcare management services offices located in Norfolk, Va., and Baltimore. CHM has reportedly agreed to plead guilty to a single count of mail fraud based on a Sept. 21, 1995 mailing of a client invoice in Virginia. The criminal charge covers a period of time ending in 1999.
The agreement between CHM and the DOJ is subject to approval by a federal district judge in Norfolk, Virginia.
“We have been working closely with the Department of Justice to resolve this matter,” said Grover Davis, chairman and CEO of the company. “We have taken steps to clarify our billing practices and eliminate inconsistencies in their application. Today’s settlement is one of the last steps needed to put this investigation behind us and allows us to move forward, maintaining our focus on providing quality service to our clients.”
Under the terms of the plea agreement, CHM will reportedly pay a fine of $8 million. As a result, Crawford will record an after-tax charge of $8 million in the third quarter of 2003.
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