New York Hospital Settles Fraud Charges Twice in Six Years

From the NY Times, Staten Island University Hospital has agreed to pay $76.5 million to settle claims that it fraudulantly billed the state's Medicaid program. This is the second time the hospital has been charged with over-billing Medicaid. In 1999, it paid Medicaid $45 million and agreed to provide free care worth $39 million to settle previous claims. New York Attorney General Elliot Spitzer also issued a criminal complaint against the hospital, but dismissed it in response to the settlement. Spitzer noted "the magnitude and depth of this fraud, and the willingness of the leadership there to tolerate it, was unusual."
The hospital was charged with billing Medicaid for clinic services at a higher rate allowed for clinics that are open only part-time, while it ran the clinics full-time. It was also charged with lying on state financial reports. The investigation found that the hospital had real-estate contracts with a doctor who was allegedly an associate of the Gambino crime family.
Hospital executives who were warned by their lawyer and the Department of Health, CEO Americo Varone, Executive Vice President Joseph Pisani, and Senior Vice President James Walsh, have left the hospital.
The hospital released a statement that "we deeply regret and are embarassed by the misconduct carried out by former executives of the hospital that led to this settlement."
This is just a reminder that pharmaceutical companies are hardly the only health care organizations accused of misconduct, nor are they necessarily responsible for the worst misconduct in health care.