New York’s Westchester Medical Center to Settle FCA Violations for $18.8 Million

New York’s Westchester Medical Center to Settle FCA Violations for $18.8 Million

Illegal kickback cases can be the most factually-complex False Claims Act lawsuits to grace the desks of state and federal attorneys and investigators. Today’s case, which involves one of the most prestigious teaching hospitals in the United States, is certainly no exception – and even government officials referred to the schemes as “intricate.” Nonetheless, the unlawful financial relationships between the Westchester Medical Center and several area cardiologists were artfully unraveled by skilled investigators, and the Center ultimately agreed to pay $18.8 million to settle the claims.

According to a statement by Manhattan U.S. Attorney Preet Bharara:

“The conduct of Westchester Medical Center is the reason the Anti-Kickback Statute and the Stark Law are so important – they are laws that help to rid the healthcare industry of conflicts that can improperly influence medical judgment, potentially jeopardizing patient care and causing federal healthcare programs to pay for excessive or unnecessary treatments. Hospitals and medical practices have an obligation to patients, and taxpayers, to ensure their arrangements conform to the requirements of these laws.”

Details of the fraud and misconduct within the hospital system

The Westchester Medical Center is the primary clinical affiliate to the renowned New York Medical College, and generations of practitioners have received invaluable training in its facilities. Nonetheless, the hospital chain is accused of committing significant violations of the anti-kickback provisions prohibited under both state and federal laws, including the following acts of misconduct:

  • Advancement of funds and resources to a regional cardiology practice for the “express purpose” of generating as many referrals to the hospital as possible;
  • Payment by the hospital of thousands of dollars for “consulting fees” that were not actually tied to genuine work or consulting services;
  • Work by hospital fellows in regional practitioners’ offices free of charge, which was thereafter billed to Medicare and Medicaid;
  • Payment by the hospital to a local cardiology practice of $450,000 to cover “operating expenses.”

When pressed by investigators for information relating to the consulting fees paid by the hospital to local cardiologists, it responded that it was unable to locate any evidence supporting any actual work performed.

Federal and state governments pleased with results

The results of the investigation came about due to a joint effort by the Department of Justice, the Department of Health and Human Services, and the Federal Bureau of Investigation. In this particular case, a whistleblower did not commence the lawsuit; however, this type of misconduct is commonly uncovered and reported by whistleblowers within the healthcare industry.

The FBI commented:

“Westchester Medical Center participated in a coordinated shakedown of Medicare and, by extension, taxpayers. Today, they agreed to pay more than $18 million to resolve their liabilities and enable this government program to serve the seniors it was designed to help.”

Likewise, the Department of Health and Human Services commented, stating:

“Westchester Medical Center’s aggressive, intricate kickbacks and other fraud schemes in this case threatened the impartiality of medical referrals, the financial integrity of Medicare, and the public’s trust in the healthcare system. Our agency will continue to investigate those who seek to cheat federal healthcare programs.”

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By |2022-04-22T05:43:32-04:00June 10th, 2015|Healthcare Fraud|