A New York hospital reached an agreement with federal prosecutors to pay roughly $13.4 million to avoid a trial. The hospital was facing charges that it made more than 2,000 fraudulent Medicaid claims in connection with its detoxification and drug treatment programs. The false claims generated over $9 million in Medicaid payments from the federal government. Health care professionals and medical facilities all over the country are facing increased scrutiny as government officials address problems with the Medicare and Medicaid programs.

The hospital was accused of allowing patients into the program who did not need its services. Some patients were admitted multiple times for the same condition over a short period of time. Prosecutors claimed that the hospital knew it was violating the law in submitting these claims, but continued to do so anyway. The hospital was also accused of paying kickbacks to people who referred patients to the program. Other medical facilities were also connected to the fraudulent practices, which at least one estimate suggested cost the government more than $50 million over a four year period.

A Missouri marketing firm was used to direct patients to the detox program. That firm also participated in this settlement. The settlement agreement now must be approved by a federal judge before the case can be dismissed. The hospital is eager to avoid further bad press and move forward with its business. It is not clear if any charges will be filed against individuals or other entities for their roles in the fraudulent Medicaid claims.

Avoiding a trial may have been the best outcome for the hospital. Prosecutors are growing increasingly aggressive in cases involving Medicaid and Medicare fraud. Anyone accused of these crimes should take immediate action to protect their interests.

Source: The New York Post, “Hosp to pay $13.4M for Med ‘scam’,” Carl Campanile, 10 October 2011

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