Two Sound Shore Health System hospitals in Westchester will pay New York state approximately $2.3 million to settle claims of fraud in Medicaid prescription drug billings brought by the state Attorney General”™s Office.
The recent settlement was announced by Attorney General Eric T. Schneiderman. Sound Shore Medical Center of Westchester in New Rochelle has agreed to repay the state approximately $2.24 million and Mount Vernon Hospital already has repaid approximately $85,500, Schneiderman said.
The penalty payments are double the amounts the hospitals overbilled the state Medicaid program, with interest added, Schneiderman and Sound Shore officials said. Hospital officials in a statement said Sound Shore agreed to refund “billing errors.”
Investigators in the attorney general”™s Medicaid Fraud Control Unit found that the hospitals improperly billed Medicaid in excess of the hospitals”™ cost of physician-administered drugs, resulting in a profit of more than $1 million. State law prohibits hospitals and doctors from profiting on the drugs they administer.
Sound Shore officials said the billing errors were under $1 million.
“Through the unlawful overbilling of Medicaid, these health care providers shortchanged New York state taxpayers to make a profit, and now they will be held accountable for their misconduct,” Schneiderman said in a press release. “In this time of fiscal crisis, we can”™t afford to waste a single penny on fraud.”
Hospital officials noted that Sound Shore is a nonprofit corporation and reinvests all funds it receives “into the services we provide to our communities,” regardless of a person”™s ability to pay.
Sound Shore officials said the attorney general”™s audit of the “complex” Medicaid billing process found a small number of errors from 2004 to 2011.
“Sound Shore Health System has implemented procedures, with the aid of their new electronic health record system, to ensure that all billing is processed properly,” they said.
The Westchester investigation was part of a statewide project by the Attorney General”™s Office to examine reimbursement claims for injectable drugs by hospitals and physicians for compliance with state pricing standards.
The review to date has led to the recovery of more than $19.9 million from more than 145 providers, including hospitals, physician group practices and individual physicians. Two providers have been criminally prosecuted.
