On October 24, 2012, the U.S. Attorney for the Southern District of New York announced that a New York public hospital, Westchester Medical Center (“WMC”), through its parent corporation, has agreed to pay $7 million to settle a federal civil fraud lawsuit filed under the False Claims Act from which the federal government will receive $3.5 million and the State of New York will receive $3.5 million. The federal lawsuit was filed, settled, and the settlement was approved by a federal judge, on October 24, 2012. The False Claims Act lawsuit alleged that WMC submitted false reimbursement claims to Medicaid that amounted to millions of dollars, for outpatient services improperly provided at WMC’s mental health center and without the required core documentation that was required under Medicaid regulations.
The civil lawsuit alleged that WMC operated a large public mental health facility known as Behavioral Health Center (“BHC”) that provided outpatient behavioral health services to Westchester County residents with mental health issues. By billing Medicaid for reimbursement for mental health services, WMC (BHC) was required to maintain progress notes, treatment plans, and other required documents for each patient for whom services were provided and for whom bills were submitted to Medicaid, in order to support that the services billed were actually provided to the patients.
The lawsuit claimed that from August 2001 through June 2010, WMC did not have the required core documentation in support of the bills that were submitted to Medicaid, that the management of WMC knew for years that the proper documentation was missing but did not properly address the problem or audit the records of BHC, and that WMC failed to return to Medicaid the over-payments it knowingly received in the cases where proper documentation was missing. It was further claimed that many of the services underlying the claims did not meet the minimum duration requirements and/or were provided by staff who did not have the proper certification. The federal government alleged that as a result, WMC received millions of dollars in reimbursements to which it was not entitled.
In announcing the federal government’s claims against WMC under the False Claims Act and the filing and the settlement of the lawsuit on October 24, 2012, Manhattan U.S. Attorney Preet Bharara stated, “Medicaid is a vital resource for people who suffer from physical and mental illnesses and related conditions. We have absolutely no tolerance for those who fail to comply with the program, particularly in these lean times when budgets are stretched thin and belts are being tightened. We will continue to work with our federal and state partners to protect the Medicaid program against waste, fraud and abuse.”
The Stipulation And Order Of Settlement And Dismissal filed in the federal lawsuit can be read in its entirety by clicking here.
The Complaint filed in the United States District Court for the District of Manhattan can be read in its entirety by clicking here.
The original claim under the False Claims Act was filed by an individual on behalf of the United States under the qui tam provisions of the False Claims Act (31 U.S.C. Section 3730(b)). Under the provisions of the False Claims Act, the individual who filed the federal lawsuit before the U.S. government intervened will be entitled to a portion of the recovery.
If you may be aware of a claim that falls under the False Claims Act, you may be entitled to share in a portion of the recovery if the claim is successful, which can be millions of dollars under some circumstances. If you may have knowledge of facts or circumstances that may give rise to a False Claims Act claim, you should promplty consult with a qui tam attorney (False Claims Act attorney) to investigate whether you have the basis for filing such a claim.
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