New York Attorney General Files ‘Reverse’ False Claims Act Case Against Two Prominent NY Hospitals

New York Attorney General Files ‘Reverse’ False Claims Act Case Against Two Prominent NY Hospitals

We cover quite a few stories about healthcare fraud cases litigated under the False Claims Act. Most of the time, these cases involve illegal upcoding or billing for services never rendered – two practices which net the government billions of dollars in recoveries and penalties. A concept known as “reverse” false claims pertains to a situation where a healthcare facility receives overpayment for services, is aware of the overpayment, and fails to properly return the overpayment to the government within the requisite 60-day period. This “sin of omission” is likewise costing the federal and state governments billions of dollars and recently emerged in a case known as U.S. v. Continuum Health Partners, Inc., et al.

Details of Case Against Continuum Health Partners

The complaint against Continuum was originally advanced by a former employee with the healthcare management company – who is responsible for overseeing operations of notable New York-area hospitals like Beth Israel Medical Center and St. Luke’s-Roosevelt Hospital Center. According to allegations, the defendants were aware of an overpayment of nearly $1 million in Medicaid claims in 2011 and did not take steps to repay the overages.

More specifically, the relator alleges that between 2009 and 2010, Continuum submitted $1 million worth of erroneous claims to Medicaid on behalf of its hospitals. When pressed, Continuum advanced the argument that the oversights were the result of a software problem and pertained only to claims linked to patients enrolled in a Medicaid Managed Care Organization. According to Continuum, the software glitch prompted providers to submit claims for payment above and beyond that which is allowed by the Medicaid MCO regulations. Of these errant submissions, Continuum received payment for most of them and collected large sums of money in violation of Medicaid rules.

According to the relator, Continuum was made aware of the glitch with the software program in late 2010. She then put together a spreadsheet in February, 2011, detailing nearly every overpayment from Medicaid. Continuum continued to allegedly ignore the problem until the New York Office of State Comptroller brought the issue to Continuum’s attention – questioning it about close to 600 overpayments. The remaining 300 overpayments were not repaid until early 2013, after the federal government issued an investigative demand for repayment.

In sum, it took Continuum over two years to complete repayment to Medicaid – and only after repeated prompting by government authorities. Under applicable Medicaid rules, overpayments are to be returned within 60 days of receipt.

Comments from Officials

According to statistics, the New York state Medicaid program costs taxpayers close to $50 billion annually. U.S. Attorney for the District of Manhattan remarked:

“The law requires hospitals that receive federal funds to which they are not entitled to promptly return them. They cannot just keep the money – after learning that they should not have received it – in the hopes that the government will not figure it out. To do so is fraud. I want to thank the office of New York State Comptroller Thomas DiNapoli, a frequent partner in these types of cases, for their excellent work in this investigation.”

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By |2019-03-21T12:23:03-04:00July 8th, 2014|Healthcare Fraud|