The US Federal Reserve is set to offer up to $300 million to a diabetes plan that’s being sued by a company that claims the plan overpaid its workers.
Reuters reported on Thursday that the Fed will pay $1.2 million to the Gerd Care Plan, which has a contract with the U.S. Department of Veterans Affairs.
The Gerd Plan was established in the 1980s and provides diabetes care for about 300,000 veterans, according to the Wall Street Journal.
The company, Gerd Healthcare, sued the VA in October 2016 and has since filed lawsuits against other healthcare providers.
It claims the VA paid about $3 million in salary and benefits to Gerd employees in 2016, the Journal reported.
The VA paid $5.3 million to Gerad in 2017 and 2018.
The lawsuit also claims the agency did not pay Gerd enough to cover the cost of medical care.
“The Gerd care plans contract with VA for the care of VA employees is not in the best interests of VA and Gerd should not have been forced to take a cut from VA in the first place,” Gerd Chief Executive Officer John Binder said in a statement to Reuters.
“We expect the court to recognize that the VA has not paid Gerd properly, and that the Gerad Plan was a failure for veterans and the broader healthcare industry.”
Gerd is being represented by attorney Mark Hurd, according the Wall St Journal.