$2.86 million settlement reached with company accused of overbilling Colorado prison system
A Chicago-based staffing company has agreed to pay almost $3 million to the state of Colorado to settle accusations it overcharged the Colorado Department of Corrections for inmate health care.
The Colorado Attorney General's Office announced the settlement Friday.
The AG's office accused Quality Placement Authority, LLC, of breaching its 2018 contract with the CDOC and violating the Colorado False Claims Act, a bill passed by the state legislature and signed into law in 2022.
"When companies do business with the state, we expect them to play by the rules and live up to their obligations," Colorado AG Phil Weiser stated in a press release announcing the settlement. "The Colorado False Claims Act gives us a powerful tool to protect taxpayer dollars, recover public funds when they are misused, and deter fraud against the state."
Specifically, the staffing and recruiting firm knowingly submitted "hundreds of invoices" to the CDOC "for thousands of shifts" covered by local health care providers it sent to state prisons for inmate health care. According to the settlement agreement, the company created fake home addresses of the health care providers to increase billable travel time to the prisons.
Two examples were provided in the settlement agreement: In one, a health care provider was allegedly told by a QPA recruiter that he wouldn't qualify for a higher travel rate because "he only lived 128 miles away" from the prison.
"Rather than billing CDOC for his time at the local rate," the settlement agreement reads, "the recruiter instructed the HCP to get his name added to a utility bill at his out-of-state father-in-law's address. QPA then used that out-of-state address - where, as QPA knew, the HCP did not reside - as the basis for submitting at least 18 invoices for the local HCP's time at the travel rate. These invoices overbilled CDOC by more than $63,000 for that HCP's time alone."
Another health care provider was instructed by QPA personnel to claim she commuted from Texas to provide services at Colorado inmates, despite the fact she lived in Colorado. The Department of Corrections received 37 invoices for this provider's work, all with maps showing a Texas residence, according to the settlement agreement. The tactic resulted in more than $110,000 overbilled charges from this provider's alleged travel time alone, per the agreement.
The settlement agreement does not state the duration of the alleged fraud, nor when or in which jurisdiction the AG's office filed its complaint.
QPA was rolled into Staffing Network Holdings, LLC, in a merger at the end of 2022. Both businesses were housed at the same location in Oak Terrace, Illinois, a Chicago suburb. In the settlement agreement, Staffing Holding Network is scheduled to pay $2.86 million, with interest, over several installments stretching into 2030.
CBS Colorado reached out to Staffing Network Holdings for comment.
Staffing Network Holdings is currently in settlement negotiations with a former CDOC inmate. That inmate filed a civil lawsuit in 2024 against the company and a registered nurse who was working for it - and also against the CDOC and several physicians, nurses and corrections officers under its employ. The lawsuit claims the Sterling prison inmate was injured during their care two years earlier and is now permanently disabled with back pain after suffering an infection.
That 45-year-old inmate is now out of prison and on parole.
