NEW YORK – New York Presbyterian Hudson Valley Hospital at Peekskill-Cortlandt has settled a case for violating the law by making illegal kickback payments to a Westchester County oncology practice in exchange for its doctors allegedly referring approximately 114 patients to the hospital.
U.S. Attorney for the Southern District of New York Jay Clayton said Uncle Sam had filed and settled a healthcare fraud lawsuit against the hospital which prior to 2015 was known as Hudson Valley Hospital Center.
The settlement resolves allegations that the hospital improperly paid millions of dollars to a Westchester oncology practice by referring Medicare and Medicaid patients to the hospital without a proper justification for the payments.
Meanwhile, Attorney General Letitia James reported a joint investigation between her office’s Medicaid Fraud Control Unit and the United States Attorney’s Office for the Southern District of New York revealed that from January 2011 through December 2019, the medical center and its predecessor, Hudson Valley Hospital Center, paid millions of dollars to the oncology practice, which then referred its patients for oncology services at the hospitals.
James said under a settlement the hospital will pay $616,000 in damages for false claims to New York’s Medicaid program.
“New Yorkers should be able to trust that their doctors are making decisions based on their best interests, not financial incentives,” said James who added, “The illegal kickback scheme undermined cancer patients’ critical relationships with their health care providers. I will continue to go after illegal financial schemes that corrupt our health care system and prevent patients from getting the care they deserve.”
The investigation found that from January 2011 through December 2019, the medical facility offered and paid the oncology practice over $4 million in fees. Those fees were paid in connection with three agreements – including for work that was either not performed, not performed as called for in the agreements, or for which the hospital lacks any time records – to induce the oncology practice to refer its patients to Hudson Valley for oncology-related medical services.
As a result of this scheme, false claims were submitted to Medicaid in violation of the New York State False Claims Act.
Under the settlement, the hospital will pay $6.8 million plus interest to the federal government with $616,676.14, representing damages to Medicaid and over $367,000 going directly to New York’s Medicaid program.
The case against the hospital was initiated by a former employee, who will receive a portion of the settlement because the former employee filed a whistleblower lawsuit under the federal and New York False Claims Acts, which allow people to file civil actions under seal on behalf of the government and share in any recovery.
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