A hospital in New York state has admitted to violating the Anti-Kickback Statute and the Stark Law and will pay $18.8 million to resolve liabilities.
The resolution was announced recently by Preet Bharara, JD, the U.S. attorney for the Southern District of New York. Westchester Medical Center (WMC) in Valhalla, NY, also admitted to submission of costs reports to Medicare seeking reimbursement for charges WMC did not incur.
Diego Rodriguez, assistant director-in-charge of the Federal Bureau of Investigation (FBI), says WMC participated in “a coordinated shakedown of Medicare and, by extension, taxpayers.”
According to the complaint-in-intervention filed in Manhattan federal court, WMC operates a tertiary and quaternary care hospital in Valhalla, NY, and serves as the primary clinical affiliate of New York Medical College. From approximately 2000 through 2007, WMC maintained a financial relationship with Cardiology Consultants of Westchester (CCW), a practice formerly operating on WMC’s Valhalla campus, which violated the Anti-Kickback Statute and the Stark Law, the FBI says.
In particular, the complaint-in-intervention alleges that WMC advanced monies to CCW to open a practice for the express purpose of generating referrals to the hospital. When CCW began making payments to WMC purportedly repaying the advances, WMC entered into retroactive, no-work consulting agreements under which it paid CCW tens of thousands of dollars.
The complaint-in-intervention alleges that around this same time, WMC began permitting CCW to use WMC’s fellows in CCW’s private office free of charge, contrary to WMC’s historic practice. As a result, WMC’s submission of claims to the Medicare program for services rendered to patients referred to WMC by CCW’s shareholder physicians violated the False Claims Act.
Additionally, during the same time period, through cost reports filed with the Centers for Medicare and Medicaid Services, WMC wrongly sought and obtained reimbursement for certain costs that WMC did not incur and that were not reimbursable under the relevant cost-reporting rules.
During the period from approximately April 2003 through July 2005, CCW referred patients for hundreds of medical procedures at WMC. For certain years during the relevant period, WMC charged various physician practices for a portion of the salaries and expenses relating to residents and fellows who trained at WMC. During the relevant period, fellows in WMC’s cardiology fellowship program performed certain services within CCW’s private offices as part of their regular clinical rotation.
