New York-based Westchester Medical Center has agreed to pay $18.8 million to settle a federal lawsuit regarding allegations that the hospital had engaged in an illegal kickback scheme with a former cardiology practice and filed fraudulent claims to Medicare.
The settlement was announced today in Manhattan by Preet Bharara of the U.S. Attorney's Office.
Bharara said the complaint was filed on the basis of misconduct on the medical center's part involving inappropriate payments to Cardiology Consultants of Westchester PC from 2000 to 2007. Westchester was also cited for obtaining reimbursements from Medicare for false medical costs.
The prosecutors asserted that Westchester's financial dealings during the period were in direct violation of the federal Anti-Kickback Statute and the Stark Law.
"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 health care system," Special Agent Scott Lampert of the U.S. Department of Health and Human Services, said.
Bharara explained that laws, such as the Stark Law and the Anti-Kickback Statute, were created in order protect the health care industry from dealings that can affect medical judgment improperly and jeopardize patient care. Without these established laws, federal health care programs would have to pay for treatments that are excessive or even unnecessary.
According to statement made by Westchester Medical, the alleged incident occurred during the administration of the previous management.
"Although the Medical Center believes that its financial relationships with its clinical faculty are customary for academic medical centers of its size and complexity, we acknowledge that, with respect to a very small number of legacy relationships, we could not produce documentation sufficient to meet certain technical requirements of federal law," the New York hospital stated.
The announcement of the $18.8 million settlement came a week after the investors service Moody's said it had downgraded the bond rating for Westchester County Health Corp., the public benefit company that manages Westchester Medical Center, from A3 to Baa1.
The alleged violations were first brought by Dan Bisk, Westchester Medical's former compliance officer, in December 2006. When Bask died three years later, the case was pursued on his behalf by his widow Chris Carrs. Court papers show that Carrs will receive $3.71 million from the recovery.
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