When Maxim Healthcare Services settled one of the government's largest-ever medical fraud cases last week, the Medicaid and Veterans Affairs contractor agreed to pay $150 million and implement a host of corporate reforms.

But Maxim, a Columbia-based home health and medical staffing company founded by Ravens owner Steve Bisciotti, avoided the penalty that would have the biggest impact on its bottom line: disbarment from federal health care programs.

That's the case with nearly all of the companies ever charged with cheating government programs — including thousands of health care companies that are defendants in most of the cases and that settled civil charges for a record $2.5 billion in the 2010 fiscal year.

"It's known as 'pay and chase' — pay the money out now and chase it down later when we find out there is fraud," said Paul Thacker, an investigator at the watchdog group Project on Government Oversight. "The fines become a cost of doing business."

It's a cycle that has led to taxpayer waste but one that authorities say could be broken by newly aggressive government inspectors armed with resources from the federal health care reform law, as well as new state fraud laws. And in Maxim's case, company officials agreed to an outside monitor, a requirement that's increasingly sought by prosecutors.

Maryland is one of more than two dozen states that have passed a version of the False Claims Act, the primary federal vehicle used to pursue fraud. The state law was championed by Lt. Gov. Anthony Brown, who expressed optimism that more cheaters would be caught initially and then fraud would decline over time.

Before it passed the law last year, the state couldn't level fines; it could only recoup defrauded funds. Now it can collect fines up to three times that amount and participate in federal settlements with companies in its own backyard. Brown said that means the state is no longer providing the equivalent of "interest-free loans" to providers who defraud the system.

"The big fines are a major deterrent," Brown said in an interview. He added that fines and other remedies short of disbarment ensure that the government has the latitude to continue working with companies that provide crucial services.

Maxim, which has hundreds of offices around the country, provides services that can be billed to government health programs. They include in-home medical and non-medical care, medical facility staffing, immunization and screening programs, and autism services.

The privately owned company was founded by Bisciotti, who launched his first staffing company along with his cousin Jim Davis in 1983. It was called Aerotek, now Allegis Group, and focused on aerospace and technology companies. Bisciotti and Davis each owned 46 percent of Maxim in 2005, according to a state licensing form, but Maxim officials say Bisciotti has never been involved in daily operations. Bisciotti declined to comment.

In addition to the fines, Maxim has agreed to a series of changes as part of its settlement of charges that it defrauded the VA and Medicaid of more than $61 million. The company has brought in new leadership, doubled the size of its compliance and ethics department, and retrained its employees.

Authorities also sought charges against eight former Maxim employees, including three senior managers and the parent of a former patient, who all pleaded guilty to felony charges related to the submission of fraudulent billings, creation of fraudulent documentation and false statements about their activities from 2003 to 2009.

Officials said the company billed government programs a total of $2 billion in 43 states during that time.

Law enforcement officials said the case should have a wide-ranging impact not only on the company but also the industry. J. Gilmore Childers, acting U.S. attorney for New Jersey, said in a statement: "It is our hope that Maxim, in cleaning up its own house, will be a lighthouse influencing best practices across the industry."

Under another provision of the settlement, company officials also hired an outside monitor.

Peter Keith, an attorney at the Gallagher, Evelius & Jones law firm in Baltimore who will serve as the monitor, said he will be a watchdog for taxpayers at Maxim. He'll have access to executives and employees and will observe, investigate and audit the company's activities for federal authorities.

"The concept of having someone present within the company, with the authority to review the company's activities and report back to the government regarding what is occurring, has been developed as way of ensuring that misdeeds are not repeated and helping companies to move forward and develop best practices," Keith said.

Barring a company as large as Maxim could make it more difficult for federal health care programs to function, and actually harm those with few other means of getting health care, said Richard Kusserow, a former inspector general at the U.S. Department of Health and Human Services and now a consultant.

"If they're providing health care coverage for 100,000 beneficiaries, they'll disrupt their coverage," he said. "Suppose you're a nursing home, and the government shuts you down, what happens to them? The government's mission is twofold: protect the taxpayer and protect the beneficiaries, and the beneficiaries come first."