New York Hospital Settles Lawsuit For $13.4 Million; Kingston, New York Medical Malpractice Attorney Discusses The Alleged Fraudulent Medicare And Medicaid Programs

Cases, Hospitals

A downtown New York hospital has agreed to settle a lawsuit brought by the Brooklyn United State’s attorney’s office and the office of New York state Attorney General Eric Schneiderman. The lawsuit was a qui tam—or whistleblower—action made under New York’s False Claims Act. The lawsuit alleged that the downtown New York hospital conspired with an out-of-state vendor to operate an alcohol and drug treatment program for the hospital.

The problem? The vendor was not licensed to operate the alcohol and inpatient drug treatment program in New York State. But making matters worse, the hospital also filed false reimbursement claims to Medicare and Medicaid for services rendered by that unlicensed detox program. Then, in violation of the New York anti-kickback law, the hospital also paid the vendor a monthly fee for referrals to the alcohol and drug treatment program. Essentially, anti-kickback legislation prevents fraud and abuse by preventing providers for offering rewards for referrals in an effort to get more government contract.

The parties settled the lawsuit for $13.4 million dollars which would bring approximately $12.6 million to the Medicaid program and another $800,000 to the federal Medicare program.

When we think about health care, we always think about cost; especially in the current economic environment and closeness in time to the controversial Affordable Care Act. The cost of Medicaid and Medicare are always monumental and a large expense when discussing health care spending. Some have proposed to use the tort reform to limit New York medical malpractice awards.

However, this is a horrible idea to limit the rightful compensation that victims of New York medical malpractice deserve. The better option, which was laudably done here, is to go after the fraudulent parties. There will always be individuals trying to take advantage of the system. Taking from the wrongdoers and keeping it in the poor’s hands will not only help lower health care costs, but will also help those who truly deserve it. Which will, in turn, help lower health care costs even further because victims who receive the compensation they need will not be dependent on the system to support them. Thus, you are lowering costs by pulling it from those who do not deserve it, and you are feeding people who need it and would otherwise rely on public assistance.

Granted, going after wrongdoers will not help lower all the health care costs. Mindful that $13.4 million is just a drop in the bucket compared to the $2.6 trillion spent in recent years. But in the aggregate, any little bit will help cut costs for Americans. Even if the costs do not appear as large as we want, they will still help those in need by not cutting awards with the tort reform.

But what do you think? I would love to hear from you! Leave a comment or I also welcome your phone call on my toll-free cell at 1-866-889-6882 or you can drop me an e-mail at . You are always welcome to request my FREE book, The Seven Deadly Mistakes of Malpractice Victims, at the home page of my website at