Attorney General James Secures $4 Million from Companies Involved in Alleged Fraudulent Physical Therapy Scheme

 

Defendants Alleged to Have Had Non-licensed Individuals Provide Physical Therapy Services

Includes $2 Million to New York State Medicaid Program Alone

  New York Attorney General Letitia James announced her office has secured $4 million from several physical therapy offices operated throughout New York City by Alex and Diana Klurfeld, and their companies Williamsburg Physical Therapy, P.C. and Euro Physical Therapy, P.C. (Williamsburg PT). Today's agreement resolves allegations that the couple and their companies falsely billed Medicaid and other federal health care programs for physical therapy services, as well as for having had non-licensed individuals provide physical therapy services.

“New Yorkers deserve to be treated by accredited providers, especially during a global health crisis,” said Attorney General James. “On my watch, no provider will get away with illegally billing Medicaid for unlicensed services. My office will always fight to ensure that unscrupulous actors are held to account.”

The agreement resolves allegations that during the period from January 1, 2008, through July 27, 2018, Williamsburg PT billed Medicaid, Medicare, the Federal Employees’ Compensation Act Program (FECA), and the Federal Employees’ Health Benefits Program (FEHBP) for physical therapy services provided and/or supervised by someone other than the licensed physical therapists identified on the claims, including unlicensed aides. The agreement also resolves allegations that Williamsburg PT billed federal health programs for backdated physical therapy services provided after the treatment authorization had expired.

As part of the agreement, Williamsburg PT will pay $4 million to the United States and to New York state, half of which is to resolve claims pertaining to New York’s Medicaid Program. Of the $2 million related to the New York Medicaid program, $1.2 million will go to New York and $800,000 will go to the federal government.

The case against Williamsburg PT was initiated by former Williamsburg PT employees and whistleblowers, Ana Barbara Zayas and Alexandra Rojas, who will receive a portion of the settlement. The whistleblower lawsuit was filed under the qui tam provisions of the federal and New York False Claims Act, which allow people to file civil actions on behalf of the government and share in any recovery.

New York’s claims in the qui tam were handled by the Medicaid Fraud Control Unit (MFCU) in the Office of the Attorney General, which worked closely with the U.S. Attorney's Office for the Eastern District of New York. 

MFCU receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $60,071,905 for federal fiscal year (FY) 2019-20, of which $45,053,932 is federally funded. The remaining 25 percent of the approved grant — totaling $15,017,973 for FY 2019-20 — is funded by New York state. MFCU’s recoveries in law enforcement actions regularly return more to the state than the unit receives in state funding.