New York Heart Center Settles False Claims Act Allegations for $1.33 Million

In a recent announcement from the Department of Justice of the Northern District of New York, the New York Heart Center has agreed to pay $1.33 million to avoid liability stemming from allegations of unlawful referrals. The settlement resolved a whistleblower lawsuit filed under the False Claims Act, which also involved several counts under the Stark Law (also known as the Physician Self-Referral Law).

According to the complaint, New York Heart Center (known officially as Cardiovascular Specialists P.C.) was engaged in the years-long practice of implementing a physician/patient referral formula, whereby doctors were allegedly offered certain advantages and benefits for referring patients to the Center – a practice which is expressly prohibited by both the Stark Law and the FCA. 

Details of the Case Against New York Heart Center

The details of the allegations against the New York Heart Center reveal a familiar attempt to reward practitioners for drumming up patient business and referring a certain heightened volume of clients to the practice. According to the complaint, for a period spanning from September 2007 through August 2008, the Center had implemented a complex formula to determine proper payments and remunerations for physicians having referred business. More specifically, the formula took into account the number of patient referrals made by doctors to the Center for both nuclear and CT scans. In essence, the higher volume of referrals, the better the pay – a practice clearly prohibited by federal law.

Government’s Response to Settlement

The federal government has worked diligently for the past several years on the punishment and deterrence of those choosing to engage in fraud involving Medicare and Medicaid clients. The U.S. Attorney for the Northern District of New York reiterated this commitment by stating, “Today’s settlement is another example of this office’s commitment to ensure that services paid for by federal healthcare programs are based on the best interests of patients rather than the financial interests of referring physicians. The United States Department of Health and Human Services’ Office of Inspector General should be commended for bringing this issue to light and for its outstanding investigation.”

Likewise, the Department of Health and Human Services further extrapolated on the common goal to eliminate healthcare fraud by stating, “Medical decisions should always be made on the basis on what’s best for the patient’s health, not the physician’s finances. The compensation system in place in this case had the potential to influence medical judgment, which would be unacceptable.”

The federal Stark Law is designed to eliminate the “taint” of financial impropriety from the doctor-patient relationship. The law recognizes the detrimental economic effects of kickbacks and referrals, and the tendency for these unlawful relationships to ultimately drive up the costs of quality healthcare for all patients. In addition to several prohibitions against referrals to family or partners, the Stark Law prohibits measuring patient volume when determining proper payment amounts for a physician or healthcare practitioner.

Contact Berger Montague Today

If you are aware of possible healthcare fraud by your doctor’s office or place of employment, please contact us today to speak with a reputable False Claims Act lawyer right away.