Hospital Fraud

October 31, 2016

Tariq Mahmood, former owner and operator of several rural hospitals across Texas, was ordered to pay roughly $1.2 million for violating the False Claims Act following his conviction for committing health care fraud and for aggravated identity theft.  DOJ (EDTX)

September 9, 2016

Los Angeles nursing home Westlake Convalescent Hospital and two physicians who worked there, Dr. Jasvant Modi and his wife Dr. Meera Modi, agreed to pay $3,563,140 to resolve charges they violated the False Claims Act by participating in a scheme to improperly transfer patients recruited from the “Skid Row” district to a hospital for medically unnecessary services, and then transfer the patients from the hospital to the nursing home for medically unnecessary stays.  According to the government, Westlake paid illegal kickbacks to a “care consortium” on Skid Row in exchange for patient referrals to Westlake.  Jasvant Modi allegedly readmitted patients from Westlake to the now-closed Temple Community Hospital and then back to Westlake to extend the patients’ Medicare-covered stays at Westlake, knowing the patients did not require further services at either facility.  Meera Modi allegedly signed medical orders for non-payable services for these same patients. Westlake allegedly billed Medicare and Medi-Cal for medically unnecessary services provided to these patients.  The allegations originated in a whistleblower lawsuit brought by former Westlake employee Ricardo Gonzales under the qui tam provisions of the False Claims Act.  He will receive a whistleblower award of $534,471 from the proceeds of the government's recovery.  DOJ (CDCA)

August 24, 2016

New York hospitals Beth Israel Medical Center (d/b/a Mount Sinai Beth Israel), St. Luke’s-Roosevelt Hospital Center (d/b/a Mount Sinai St. Luke’s) and Mount Sinai Roosevelt, and Continuum Health Partners, agreed to pay $2,950,000 to settle charges that they violated the federal and New York False Claims Act by willfully delaying repayment of over $800,000 in Medicaid overpayments that resulted from improper claims submitted because of a software error.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act.  The whistleblower will receive a yet-to-be-determined award from the proceeds of the government's recovery.  DOJ (SDNY)

August 24, 2016

New York and the Justice Department announced that three hospitals in the Mount Sinai Health System are paying a total of $2.95 million to resolve allegations that the hospitals knowingly retained over $844,000 in overpayments made by Medicaid in violation of the federal and New York False Claims Acts. Knowing retention of an overpayment from the government for more than sixty days is known as a “reverse false claim” and is a violation of both federal and state false claim acts. The entities involved include Mount Sinai Beth Israel (“Beth Israel”) (formerly Beth Israel Medical Center), Mount Sinai St. Luke’s (“St. Luke’s”) (formerly St. Luke’s Hospital) and Mount Sinai Roosevelt (“Roosevelt”) (formerly Roosevelt Hospital) (together, the “Hospitals”) – and the Hospitals’ former partnership group, Continuum Health Partners, Inc. (“Continuum,” and together with the Hospitals, “Defendants”). As part of the settlements, Defendants admitted that, beginning in 2009 due to a software compatibility issue, a coding error caused Defendants to submit claims for payment above and beyond what they had received from the managed care organization, and that Medicaid paid these claims as a secondary payor. In September 2010, the New York Office of the State Comptroller brought to Continuum’s attention a small number of these claims, and Defendants admitted that in late 2010 they were made aware of the coding error. NY

August 1, 2016

St. Joseph’s Hospital Health Center agreed to pay $3.2 million to resolve allegations it violated the federal False Claims Act and New York False Claims Act by billing the state Medicaid program for mental health services provided by unqualified staff.  Specifically, the government alleged that St. Joseph's billed Medicaid for mobile-crisis outreach services that failed to comply with Comprehensive Psychiatric Emergency Program (CPEP) staffing requirements.  The allegations originated in a whistleblower lawsuit filed by registered nurse Catherine Lembo under the qui tam provisions of the federal and New York False Claims Acts.  Ms. Lembo will receive a whistleblower award of $560,000 from the proceeds of the government’s recovery.  Whistleblower Insider

August 1, 2016

New York and the Justice Department announced that St. Joseph’s Hospital Health Center (St. Joseph’s) will pay $3.2 million to resolve allegations that it violated the federal and New York False Claims Act by presenting false claims for payment to the state Medicaid program for mental health services rendered by unqualified staff. settlements resolve allegations that St. Joseph’s knowingly presented false claims for payment to Medicaid for mobile-crisis outreach services rendered from January 1, 2007 through February 29, 2016 by personnel who failed to satisfy the basic CPEP staffing requirements. By submitting claims for payment to Medicaid without disclosing that its CPEP staff failed to meet the regulatory staffing requirements, and by accepting payment for these claims, the governments allege that St. Joseph’s misrepresented its compliance with mental health staffing requirements that are central to the provision of counseling services and, by doing so, violated the False Claims Act. As part of the settlements, St. Joseph’s admits that it was improper to have conducted mobile crisis outreach visits without a member of its CPEP professional staff present and then bill Medicaid for such services. NY