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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Friday, October 21, 2016

Manhattan U.S. Attorney Announces $5.31 Million Civil Settlement Against Hematology-Oncology Medical Practice For Submitting False Claims To Medicare And Medicaid

Preet Bharara, the United States Attorney for the Southern District of New York, and Scott Lampert, Special Agent-in-Charge of the New York Field Office of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced a $5.31 million settlement of a civil fraud lawsuit against HUDSON VALLEY ASSOCIATES, R.L.L.P. (“HUDSON VALLEY”).  This settlement resolves claims brought under the False Claims Act, alleging that HUDSON VALLEY routinely waived copayments without lawful basis and fraudulently billed Medicare for these copayments, and systematically submitted false claims for services that it did not provide and/or were not permitted under the Medicare and Medicaid program rules. 

Manhattan U.S. Attorney Preet Bharara said: “Hudson Valley Hematology Oncology Associates improperly billed Medicare and Medicaid for reimbursement, costing the taxpayers millions of dollars.  This settlement not only restores those funds, but involves detailed admissions by Hudson Valley and the imposition of safeguards to ensure against fraudulent billing in the future.”

HHS-OIG Special Agent-in-Charge Scott Lampert said: “Hudson Valley, like all Medicare and Medicaid providers, must be held to a high standard of ethical behavior.  Billing for services that are not medically necessary or not provided potentially threatens the health of both the patients and these programs and will not be tolerated.”

The Government simultaneously intervened in and settled this lawsuit, which was initially filed by a whistleblower.  As alleged in the Government’s complaint, from approximately 2010 through June 2015, HUDSON VALLEY engaged in two false and fraudulent schemes to defraud the Government.  In the first scheme, HUDSON VALLEY routinely waived Medicare beneficiaries’ required copayments and instead fraudulently billed Medicare for those copayments.  In the second scheme, HUDSON VALLEY submitted claims for payment by Medicare and Medicaid for services that were not actually performed, were not medically necessary, and/or were not properly documented. 

As part of the settlement, HUDSON VALLEY admitted, acknowledged, and accepted responsibility for engaging in the following conduct from 2010-2015:

  • Routinely waiving Medicare beneficiaries’ copayments without an individualized documented determination of financial hardship or exhaustion of reasonable collection efforts;
  • Billing Medicare for the waived copayments, resulting in higher reimbursement amounts from Medicare than HUDSON VALLEY was entitled to;
  • Overbilling Medicare and Medicaid for evaluation and management services codes, in addition to billing for routine procedures (such as chemotherapy, injections or venipunctures) on the same date, even though Hudson Valley had not documented that it provided any significant, separately identifiable evaluation and management services to the beneficiaries; and
  • Billing Medicare and Medicaid for evaluation and management services codes without documenting in the medical record that those services were medically necessary and/or that those services were actually performed.

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United States District Judge Kenneth M. Karas approved the settlement stipulation on October 19, 2016, resolving the Government’s claims against HUDSON VALLEY.  Under that settlement, HUDSON VALLEY admits to and accepts responsibility for misconduct alleged in the complaint and agrees to pay $5.31 million to the United States.  In addition, Hudson Valley entered into a corporate integrity agreement with HHS-OIG, through which it commits to establishing a compliance program, submitting to monitoring by HHS-OIG for five years, and taking other specified steps to ensure future compliance with Medicare and Medicaid rules.

Mr. Bharara praised the extensive investigative work performed by HHS-OIG.

The case is being handled by the Office’s Civil Frauds Unit.  Mr. Bharara established the Civil Frauds Unit in March 2010 to bring renewed focus and additional resources to combating healthcare and other types of frauds.  Assistant U.S. Attorney Kirti Vaidya Reddy is in charge of the case.

Topic(s): 
Healthcare Fraud
Press Release Number: 
16-273
Updated October 21, 2016