New York-Presbyterian/Brooklyn Methodist Hospital Settles Health Care Fraud Claims for $17.3 Million

 

Hospital Resolves Claims that Former Contractual Arrangements with Physicians at a Chemotherapy Infusion Center Were Unlawful “Kickbacks”

Breon Peace, United States Attorney for the Eastern District of New York, announced a settlement agreement with New York-Presbyterian/Brooklyn Methodist Hospital. The settlement agreement requires the hospital to pay $17.3 million to resolve allegations that it paid unlawful kickbacks to physicians at the hospital’s chemotherapy infusion center.  The payments were made pursuant to a contractual arrangement that linked the compensation physicians received to the number of referrals the physicians made for services at the Center.  The agreement also resolves claims that physicians at the infusion center failed to adequately supervise the chemotherapy services.  The settlement resolves claims under the federal and New York State False Claims Acts.  Of the total settlement amount, $16.410 million is to be paid to the federal government, and $890,000 is to be paid to New York State.  The Hospital voluntarily self-disclosed the issues to the United States.

“This settlement addresses a compensation scheme that incentivized physicians to make referrals for services based on how much they would be paid and were essentially kickbacks,” stated United States Attorney Peace.  “New York-Presbyterian/Brooklyn Methodist Hospital voluntarily self-disclosed the conduct to the United States, which allowed it to mitigate the penalties associated with the conduct.”

To ensure that physicians make medical decisions based solely on the needs of their patients, Medicare and Medicaid rules prohibit physicians from receiving any kind of remuneration in exchange for patient referrals for services.  The United States’ investigation of New York-Presbyterian/Brooklyn found that physicians at a chemotherapy infusion center affiliated with the hospital were paid based, in part, on the volume of referrals they generated for it.

Medicare and Medicaid rules also require that those billing for medical services be involved in the services. A hospital, for instance, cannot bill for the services of a physician if that physician did not participate in the patient care. The rules recognize that non-physicians, like nurses, provide care to patients; such care is permissible and, often, desirable. But, in many instances, such care must be provided under the supervision of a physician who is available to assist in the care if need be. At the infusion center at issue in this matter, Medicare and Medicaid were billed for services provided by non-physicians even in instances in which physicians were not available to adequately supervise the services.