Healthfirst to Pay $35 Million for Violating New York False Claims Act

LegalNewsline.com reported on September 4, 2008, that Healthfirst will pay $35 million to the state of New York to settle claims that it violated that state’s False Claims Act.

Healthfirst, the largest Medicaid Managed Care provider in New York, was alleged to have given incentives to employees based on the number of people they enrolled from 1999 to 2003.

“Medicaid providers engaged in prohibited compensation practices are committing an act of fraud against New York’s taxpayers,” Attorney General Andrew Cuomo said. “Marketing reps must not engage in a numbers game that could result in ineligible persons being enrolled in the Medicaid program.”

If you are seeing fraud on the government, contact us by calling 800,377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

Staten Island University Hospital to Pay U.S. $74 Million

The U.S. Department of Justice on September 15, 2008, released a settlement in which the Staten Island University Hospital (SIUH) has agreed to pay $74,032,565 to the United States and $14,883,883 to the State of New York to resolve claims of Medicaid, Medicare, and TRICARE (the U.S. military’s health insurance program) fraud. The total recovery of $88,916,448 is one of the largest ever against a single U.S. hospital.

Investigations carried out by the government established four individual cases of fraud.  Two of the four were introduced through suits filed by separate whistleblowers: Dr. Miguel Tirado, former Director of Chemical Dependency Services at SIUH, and Elizabeth M. Ryan, the widow of an SIUH cancer patient. Both individuals filed their suits through the federal False Claims Act, and Tirado also filed through the New York State False Claims Act.  In accordance with the settlement, the federal government will award Tirado with $2.3 million and Ryan with $3.75 million, and Tirado will also receive an additional $2.97 million from the State of New York.

In Tirado’s suit, government investigations established that from July 1994 to June 2000, SIUH had submitted claims for payment for detoxification treatment to patients for which the hospital had not received a license from the New York State Office of Alcoholism and Substance Abuse Services (OASAS). SIUH provided detoxification treatment in 12 more beds than it was authorized to do so. For this act of fraud, the hospital has agreed to pay the U.S. $11,824,056, and the State of New York $14,883,883.

In Ryan’s suit, it was found that from 1996 through 2004, SIUH had defrauded Medicare and TRICARE by using incorrect billing codes for cancer treatment in order to receive reimbursement for treatments covered by neither Medicare nor TRICARE. SIUH will pay $25,022,766 to the U.S. to settle this claim.

The other two claims established in the suit were resolved prior to its filing. The first concerns SIUH’s intentional inflation of its resident count from 1996 to 2003 in its “cost reports.” These cost reports provide the basis for how much Medicare determines to pay the hospitals for their Graduate Medical Education programs. For the settlement of this claim, SIUH has agreed to pay the U.S. $35,706,754.

In the final suit, it was found that SIUH improperly billed Medicare and Medicaid for treatment of patients in unlicensed beds from July 2003 to September 2005. The hospital has agreed to pay $1,478,989 to the U.S. to settle this claim.

In addition to the monetary penalties to be paid by SIUH, the hospital has also agreed to a Corporate Integrity Agreement with the Office of Inspector General, Department of Health and Human Services (OIG-HHS). In accordance with this agreement, SIUH will be required to maintain a compliance program to ensure against more fraud.

If you are seeing fraud on the government, contact us by calling 800,377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.

WellCare Agrees To $35.2 Million In Ongoing Investigation

On August 19, 2008, the St. Petersburg Times of Florida reported an agreement between WellCare Health Plans Inc. and U.S. prosecutors for the company to pay $35.2-million as part of an ongoing Medicaid fraud investigation.  The case has yet to be settled, however, and the agreement does not inhibit the national or state government from persisting in its investigation or making further claims. 

Constituting the $35.2 million is $24.5 million in compensation for Medicaid “behavioral health” claims by two of the companies HMO subsidiaries: WellCare of Florida Inc. and HealthEase of Florida Inc, and $10.7 million to be held conditionally by the government throughout the probe.  The benefits of more than 1.23-million recipients of state Medicaid programs, as well as 200,000 elderly and disabled customers, are managed by WellCare. 

If you are seeing fraud on the government, contact us by calling 800,377-1812 for strictly confidential advice from experienced counsel, with no fee obligation.