Whistleblower Allegations Result in $13.4M Medicaid Fraud Settlement

Pursuant to the settlement of claims brought by whistleblowers, Dr. Mathew I. Gelfand and Enrico Montaperto, New York Downtown Hospital will pay $13.4 million to settle alleged false claims to Medicaid for “unlicensed inpatient drug and alcohol treatment services,” according to a statement by NY Attorney General Eric T. Schneiderman.  The alleged scheme involved a conspiracy with an outside for-profit vendor who was allegedly paid kickbacks for patient referrals through an”administrative services agreement.”

According to the Attorney General’s complaint:

NY Downtown Hospital marketed and provided the inpatient detoxification services even though it did not have an operating certificate to do so, and that NY Downtown Hospital and SpecialCare Hospital Management Corp. violated federal and state anti-kickback laws through SpecialCare’s referral of patients to the hospital for its New Vision program, in exchange for a fee paid by the hospital.

Schneiderman praised the result and condemned those who would knowingly bilk federal and state-funded healthcare programs: “This settlement holds New York Downtown Hospital accountable for this scheme, and will make providers think twice before defrauding the Medicaid system. Together with our federal partners, we will leave no stone unturned in the fight to recover misappropriated money on behalf of New York’s taxpayers.”