New York Oncology Clinic Pays $5.3 Million to Settle Co-Pay Waiver Allegations

Hudson Valley Associates, R.L.L.P (“Hudson Valley”), a suburban New York City Hematology-Oncology medical practice, agreed on October 21, 2016 to pay $5.31 million to settle allegations originally brought by a whistleblower under the qui tam provisions of the False Claims Act.  The settlement resolves allegations that Hudson Valley engaged in two separate schemes to defraud the government.  The first scheme involved Hudson Valley routinely waiving Medicare beneficiaries’ required copayments and instead fraudulently billed Medicare for those copayments.  In the second scheme, Hudson Valley submitted claims to Medicare and Medicaid for services that were not actually performed, were not medically necessary, and/or were not properly documented.

The whistleblower who originally filed the case was a former employee of the practice who worked as a medical coder.  Under the False Claims Act, private whistleblowers with knowledge of fraud against the government may file a civil case on behalf of the United States. Whistleblowers, such as the medical coder in this case, who alert the government to fraud are entitled to 15-30 percent of the government’s recovery.

Manhattan U.S. Attorney Preet Bharara said: “Hudson Valley Hematology Oncology Associates improperly billed Medicare and Medicaid for reimbursement, costing the taxpayers millions of dollars.  This settlement not only restores those funds, but involves detailed admissions by Hudson Valley and the imposition of safeguards to ensure against fraudulent billing in the future.”