N.Y. AG nets $2.3M in settlements

Bryan Cohen Apr. 18, 2012, 1:23pm


WHITE PLAINS, N.Y. (Legal Newsline) - New York Attorney General Eric Schneiderman announced two Medicaid fraud settlements on Wednesday with Westchester hospitals resulting in more than $2.3 million in recovered taxpayer funds.

Mount Vernon Hospital and Sound Shore Medical Center of Westchester, both members of the South Shore Health System, allegedly engaged in improper over-billing for Medicaid in relation to physician-administered drugs. Mount Vernon Hospital has already repaid the state $85,497.90 and Sound Shore Medical Center of Westchester has agreed to repay the state $2,241,740.35.

"Since taking office, we have been determined to save taxpayer money by eliminating waste, fraud, and abuse wherever we find it," Schneiderman said. "Through the unlawful over-billing of Medicaid, these health care providers shortchanged New York state taxpayers to make a profit, and now they will be held accountable for their misconduct. In this time of fiscal crisis, we can't afford to waste a single penny on fraud."

When submitting claims to the Medicaid program, hospitals must only bill the program for the price they paid for the drugs. Schneiderman's Medicaid Fraud Control Unit alleged that Mount Vernon Hospital and Sound Shore Medical Center billed Medicaid more than the cost of the drugs, pocketing a $1 million profit. It is against New York state law for doctors and hospitals to make a profit on the drugs they administer to ensure that medical judgment is not improperly affected by monetary considerations.

Under the terms of the agreements, the hospitals agreed to pay the state double what had been defrauded plus interest.

The settlements were part of a project undertaken by Schneiderman's office to look into wide-spread failure of physicians and hospitals to submit claims properly compliant with state pricing standards for injectable drugs known as J code claims. The review resulted in more than $19.9 million recovered from more than 145 providers, including individual physicians, physician group practices and hospitals throughout the state. In addition, two providers have been criminally prosecuted.

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New York Attorney General
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