Mount Sinai hospitals to pay $3 million to settle lawsuit over Medicaid repayment delay
Hospitals and former parent company admitted to knowingly and grossly exceeding 60-day repayment rule for Medicaid overpayments.
Three hospitals within the Mount Sinai Hospital system in New York City will pay $2.95 million to settle a civil fraud lawsuit in which the hospitals and their parent company at the time admitted they failed to reimburse Medicaid within the legally prescribed timeframe of 60 days for overpayments the hospitals received, Federal and New York State prosecutors announced Wednesday.
The settlement resolves a whistleblower, or qui tam, lawsuit that accused Mount Sinai Beth Israel, Mount Sinai St. Luke's, Mount Sinai Roosevelt and Continuum Health Partners of knowingly stalling the repayment of more than $800,000 in Medicaid overpayments.
Authorities said Continuum learned that it had received the potential overpayments from Medicaid in 2011, and was legally obligated to remit the funds within 60 days. Continuum stalled for more than two years, finally repaying Medicaid in full in 2013.
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The complaint alleged that between 2009 and 2010, the hospitals and Continuum erroneously submitted 444 claims to Medicaid for payment due to a software error which the New York State Comptroller brought to their attention in 2010. A February 2011 internal investigation by Continuum identified roughly 900 potential claims totaling more than $1 million that had been wrongfully submitted to Medicaid.
The claims was compiled and submitted by an employee but instead of using the list to repay the claims, Continuum fired the employee and never brought the list to the attention of the Government, eventually taking almost two years to complete its repayments.
The individual who compiled the list and was subsequently fired eventually filed the whistleblower lawsuit.
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The defendants attempted to have the case thrown out in 2014, but Judge Edgardo Ramos denied the motion, saying the case had serious implications for false claims cases.
The settlement does include admissions by the hospitals and Continuum that due to a software glitch the hospitals submitted claims to Medicaid on their behalf as a secondary payor for services rendered to patients; that they became aware of the erroneous claims in 2010; that the whistleblower submitted a list of erroneous claims to continuum management in February 2011 and was subsequently fired; and while a few claims were paid back in 2011, they did not fully repay Medicaid until March 2013.
There was no indication given of how much the whistleblower will receive from the settlement, since whistleblowers who file suit on behalf of the government are legally entitled to a portion of the recovery.
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The case was investigated and brought by a several agencies, including the United States Attorney for the Southern District of New York, the New York Field Office of the U.S. Department of Health and Human Services, Office of Inspector General, Eric Schneiderman, New York State Attorney General, and Thomas P. DiNapoli, the New York State Comptroller.
Twitter: @BethJSanborn
