Corporate Compliance

Staten Island hospital forced to repay $76.5 million to Medicaid

Compliance Monitor, May 25, 2005

For the second time in seven years, Staten Island (NY) University Hospital has agreed to a multimillion-dollar settlement with the state of New York to answer charges of improper Medicaid billing, according to a May 18 report in The New York Times.

The hospital has agreed to pay $76.5 million over the next 12 years, representing the largest cash settlement with a provider in Medicaid history, the Times reported.

According to information released by the office of New York Attorney General Eliot Spitzer and reported in the Times, hospital officials were hatching the scheme that resulted in this record settlement before the ink was dry on a September 1999 agreement in which the hospital agreed to repay $45 million to New York Medicaid. Staten Island University Hospital also was to provide $39 million in free care for indigent patients as part of the earlier settlement.

"The magnitude and depth of this fraud, and the willingness of the [hospital] leadership to tolerate it, was unusual," Spitzer told the Times, adding that the settlement would be in lieu of criminal charges against the hospital executives involved in the fraud. "To bring a criminal case against the hospital would be the end of the institution, which would have been contrary to public policy," he said.

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