Skip to main content
Press Release

U.S. Attorney Announces $12.9 Million Settlement With The Door For Submitting Fraudulent Cost Reports

For Immediate Release
U.S. Attorney's Office, Southern District of New York
The Door Falsely Inflated the Number of Visits to its Facility on Cost Reports in Order to Fraudulently Receive More Reimbursement Money from the Indigent Care Pool

Damian Williams, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General (“HHS-OIG”) New York Regional Office, announced today that the United States filed and settled a civil fraud lawsuit against THE DOOR—A CENTER OF ALTERNATIVES (“The Door” or “Defendant”). The Government’s Complaint-in-Intervention (the “Complaint”) alleges that The Door, a healthcare provider in New York City, violated the False Claims Act by fraudulently overreporting the number of visits to its healthcare facility.  This overreporting resulted in The Door receiving excessive funding from the Indigent Care Pool, which is a program funded by both the federal government and New York State, that reimburses certain healthcare providers for uncompensated care rendered to low-income New Yorkers.

Under the settlement, approved by U.S. District Judge Alvin K. Hellerstein, The Door will pay $2,725,514.51 to the United States and has admitted and accepted responsibility for conduct alleged by the Government in the Complaint as further described below.  The Door has also agreed to pay $10,222,297.89 to the State of New York to resolve the State’s claims, for a total recovery of $12,947,812.40.

U.S. Attorney Damian Williams said: “This Office will remain vigilant in protecting public funds that are designated to help low-income New Yorkers.  The Indigent Care Pool is a limited source of funding meant to be shared among healthcare providers throughout New York State in order to further the goal of providing healthcare to all who need it.  Through its misconduct, The Door received an excessive share of this funding at the expense of other healthcare providers that were similarly trying to provide services to low-income New Yorkers, and has now been held to account.”   

HHS-OIG Special Agent in Charge Scott Lampert said: “Healthcare providers must be held to a high standard of ethical behavior. We will continue to ensure that those individuals and entities that receive funding from the federal government and/or the State of New York to care for low-income individuals operate in an honest manner.”

As described in the Complaint, The Door was required to report the number of threshold visits (“Threshold Visits”) to its facility on cost reports (“Cost Reports”) annually filed with the New York State Department of Health (“DOH”).  This metric determined, in large part, the amount of funding that The Door received from the Indigent Care Pool.  A Threshold Visit is defined, by regulation, as occurring “each time a patient crosses the threshold of a facility to receive medical care without regard to the number of services provided during that visit.”

From 2009 to 2016 (the “Covered Period”), The Door falsely reported the number of Threshold Visits to its facility, thereby causing it to receive excessive funding from the Indigent Care Pool.  Specifically, instead of reporting the number of times a patient crossed the threshold to its facility, The Door based its reporting of Threshold Visits on the number of services provided to the patient during a given visit, thus leading to an inflated number of Threshold Visits.  As a result, The Door received substantial funding from the Indigent Care Pool to which it was not entitled.

As part of the settlement, The Door admits, acknowledges, and accepts responsibility for the following conduct: 

  • During the Covered Period, The Door maintained multiple, internal versions of the Cost Reports.  One version reflected an accurate accounting of the Threshold Visit statistic, while other versions reflected an inaccurate accounting of the Threshold Visit statistic because they reported multiple services provided during a given visit.
  • The Door was aware of the definition of Threshold Visits contained in the Cost Report instructions and 10 NYCRR § 86-4.9(b), which permitted The Door to count only one Threshold Visit each time a patient crossed its threshold to obtain medical care, regardless of the number of services the patient may have received during that visit. 
  • On December 4, 2014, The Door’s then-serving Chief Financial Officer (who served in this capacity throughout the Covered Period) sent an email to a data analyst employed by The Door noting that Threshold Visits must be counted based upon the number of visits to the facility, not based upon the number of services provided during a visit or the number of visits unduplicated by individual cost center. 
  • During the Covered Period, by submitting Cost Reports to DOH that calculated the number of Threshold Visits based on the number of services provided during a given visit, rather than the number of times the patient crossed the threshold to the facility, The Door caused the Indigent Care Pool to pay funds to The Door to which it was not entitled. 

Mr. Williams praised the outstanding investigative work of HHS-OIG.  This case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Alexander J. Hogan is in charge of the case.


Nicholas Biase
(212) 637-2600

Updated February 2, 2022

Press Release Number: 22-029