Benedictine Hospital in Kingston has been accused of participating in an unlicensed inpatient drug treatment program that defrauded Medicaid of $1.3 million between 2003 and 2005 in a law suit filed by state Attorney General Andrew Cuomo, a claim the hospital denies “categorically.”
Two other hospitals have also been accused of participating in the scam. And four other hospitals in the state, including St. Joseph”™s Medical Center in Yonkers have been accused of involvement in a related kickback scheme, where patients were referred to programs run by Missouri-based Special Care Management Corp. to receive drug and alcohol related treatments they did not need. St. Joseph”™s said there are no viable claims in the legal action.
According to documents provided by Cuomo”™s office, the seven hospitals named in the suit each entered into business contracts with Special Care Management Corp. and are accused making over 14,000 false or fraudulent claims over the period from 2002 to 2006, costing taxpayers some $50 million.
The civil suit detailing the allegations was filed in October, but was not made public until the New York Post broke the story January 5. Â
Benedictine is accused in the suit by Cuomo of running an unlicensed drug and alcohol rehabilitation program called “New Visions” with referrals from Special Care Management Corp. illegally marketing it as a legitimate program and making Medicaid claims for patients who did not need the treatment.
Prosecutors said the hospitals were not entitled to Medicaid reimbursements for unlicensed programs and said there was evidence the treatments were not all medically necessary or failed to meet industry standards.Â
“This is an outrageous scam that siphoned millions of dollars from New York taxpayers and undermined the purpose of the Medicaid program,” said Cuomo in a prepared statement released after the case became public. “It”™s not only an illegal scheme on our taxpayers”™ dime, but it”™s a blow to Medicaid and the legitimate health services it supports.”
“We categorically deny the government”™s claims,” said Benedictine Hospital spokesman Sean Casey in a statement after the suit became public. Casey said Benedictine “continues to have both a state license to provide hospital services to these patients as well as a legal and constitutional right to inform the public that these services are available to those who need them.”
But officials with the state Office of Alcoholism and Substance Abuse, the agency that would license the program, said Benedictine Hospital did not have the proper license over the two-year period it was involved with Special Care Management.
Benedictine Hospital contracted with Special Care from 2001 to 2005, according to the complaint, and “knowingly operated” an unlicensed detox unit providing inpatient medically managed services to persons suffering from chemical dependency or abuse.
Prosecutors believe hospital administrators purposely intended to take patients away from a properly licensed program at the Kingston Hospital based on an internal Benedictine document describing patients as “shifted volume” from Kingston Hospital and not “new volume.”
Kingston Hospital is now in the process of transferring that license for inpatient detox programs to Benedictine Hospital as part of the merger of the two hospitals.
The complaint said the Benedictine Hospital also improperly marketed its New Visions program and questioned the medical necessity of some of the claims.
The Attorney General”™s complaint alleged that in some cases at other downstate hospitals, but apparently not at Benedictine, Special Care”™s assessment centers in New York City acted as a clearinghouse, sending patients to the defendant hospitals in the city with vacant beds to meet a monthly quota. In some cases, prosecutors believe homeless people were rounded up to fill drug treatment beds.
The lawsuit was brought by Cuomo and U.S. Attorney Benton Campbell. Officials would not comment on whether criminal charges could be filed because the investigation is ongoing. There was no explanation why criminal charges were not filed along with the original civil filing.
Special Care CEO Robert McNutt could not be reached for comment.
Four hospitals in New York state paid kickbacks to get more patients into their drug treatment programs, which billed Medicaid for services that weren’t standard or necessary and lacked state certification, the lawsuit alleges.
St. Joseph”™s Medical Center in Yonkers is alleged to have participated in the scheme but denies any wrongdoing.
“Despite years of investigation, neither the office of the attorney general of the state of New York, nor the United States attorney’s office, has articulated any viable claims,” said Gary Schulz, an attorney for St. Joseph’s.
