Federal probe costly for firm

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A Reston-based company said it has spent $500,000 in legal costs for an internal review of its handling of Medicaid claims for the D.C. government in the face of an investigation by the U.S. Attorney's Office.

Maximus Inc. said the Criminal Division of the U.S. Department of Justice sought company records pertaining to the company's work for the District, "primarily relating to the preparation and submission of federal Medicaid claims," according to filings with the U.S. Securities and Exchange Commission.

"The U.S. Attorney's Office is investigating issues pertaining to compliance with the federal laws governing Medicaid claims," the company stated.

A company spokeswoman yesterday said she could not comment beyond any information included in the company's Feb. 8 SEC filing.

The company first disclosed the investigation in 2004, saying in an SEC filing that it was confident the company had not broken any health care laws.

Maximus, which provides consulting services to government agencies, makes no statement regarding whether it believes any laws were broken in its most recent filing from earlier this month.

Company spokeswoman Rachael Rowland said yesterday any additional information on the investigation would have to come from subsequent filings.

Channing Phillips, a spokesman for the U.S. Attorney's Office, yesterday said he could not comment on the SEC filing because the federal investigation is still pending.

The company also said it cannot predict "the probability or magnitude of any other expenditure we may incur in connection with this matter at this time."

The company also said it was cooperating in the investigation by producing documents in response to the subpoena and making employees available for interviews, according to the SEC filing.

Maximus has contracted with the D.C. government for years.

The company recently has won contracts to handle the District's welfare-to-work program and to provide Medicaid billing services for the city's public school system.