The Medicaid false claims case that snagged a former health system CEO has now extended to a Thomasville hospital.

The U.S. Justice Department announced Wednesday that John D. Archbold Memorial Hospital has paid $13.9 million to the federal government to settle charges that the hospital submitted false claims to the Georgia Medicaid program. The hospital is part of Thomasville-based Archbold Medical Center.

The civil settlement follows the recent conviction of Ken Beverly, former CEO of Archbold Medical Center, on six counts of Medicaid fraud. Beverly and William Sellers, former Archbold chief financial officer, falsified documents to gain extra funds from the Medicaid program, which is jointly financed by the state and federal governments. Sellers pleaded guilty and testified against Beverly.

The settlement resolves a qui tam, or whistleblower, lawsuit filed in 2008 by Dr. Wesley Simms, a Thomasville physician who was formerly chief of staff at Archbold and a member of its board of directors.

Simms will receive $695,151 from the settlement, said his attorney, Bryan Vroon of Atlanta. It was information provided by Simms that led to the indictment of Beverly and Sellers, the attorney said.

The $13.9 million is one of the largest amounts ever paid by a Georgia hospital to settle charges of Medicaid fraud, Vroon said. Archbold Memorial Hospital was charged with misrepresenting itself as a government-operated hospital.

Beverly’s indictment alleged that Sellers, with Beverly’s knowledge and agreement, sent fake documents to the state Department of Community Health, which runs the Georgia Medicaid program.

DCH had requested that Archbold provide minutes of Thomasville Hospital Authority meetings that would show that the authority maintained control over the hospital. That documentation was necessary to prove Archbold was a “public” hospital and thus allowed to receive the extra government money – more than $9 million.

Prosecutors said the hospital authority actually had no operational control of the hospital, and met only once from 2000 through 2004.

According to Dow Jones Newswires, Archbold spokesman Mark D. Lowe said the hospital in 2007 self-disclosed to the government the results of an internal investigation by an Atlanta law firm that found the funds had been improperly obtained, due to the submission of false and inaccurate documentation.

Lowe said Archbold “immediately began working with the government to discuss remedial actions.” Archbold set aside funds during the 2007 annual audit in anticipation of a settlement.

“We sincerely regret this unfortunate incident; however, we worked closely with the authorities to resolve it appropriately,” Lowe told Dow Jones Newswires.

Here is the Thomasville Times-Enterprise article on the settlement.