St. Joseph’s Medical Center named in $8M Medicare settlement

New York State Attorney General Eric Schneiderman said Aug. 24 his office has reached settlement agreements with three area hospitals in a False Claims Act case that will return more than $8 million to the Medicaid and Medicare programs.

A state investigation found SpecialCare Hospital Management Corp., a for-profit, out-of-state vendor, illegally referred patients to unlicensed drug and alcohol treatment programs at St. Joseph’s Medical Center in Yonkers, Columbia Memorial Hospital in Hudson and Benedictine Hospital in Kingston, now known as HealthAlliance Hospital Mary”™s Avenue.

Schneiderman said St. Joseph”™s Medical Center entered into an illegal patient referral scheme with SpecialCare Hospital Management Corp., which was disguised as an “administrative services agreement.” Under the scheme, St. Joseph”™s officials paid SpecialCare a monthly fee for the referral of Medicaid patients to its unlicensed inpatient detoxicification unit, a violation of federal and state anti-kickback laws and Medicaid regulations.

Overall, Schneiderman said the three hospitals were complicit in providing patients with illegal treatment services and submitted false claims to Medicaid for those services between 2002 and 2006.

The settlements will return more than $7.3 million to the Medicaid program and $597,000 to the federal Medicare program.

“Drug and alcohol treatment programs are designed to help vulnerable people struggling with addiction,” Schneiderman said. “This settlement holds those institutions accountable for their scheme, and will make providers think twice before defrauding the Medicaid system.”

The investigation was conducted by the attorney general”™s Medicaid Fraud Control Unit and the U.S. Attorney”™s Office for the Eastern District of New York in partnership with the state Heath Departmen and the state Office of Alcohol and Substance Abuse Services.