N.Y. Hospital Settles False-Claims Charges, Will Pay $127 Million

Staten Island University Hospital will pay $127 million to settle two whistle-blower actions and a pre-suit investigation into allegations that it fraudulently billed government health insurers for medical and administrative costs from 1994 to 2003, federal prosecutors said.

Dr. Miguel Tirado and Elizabeth Ryan filed the whistle-blower suits against SIUH in 2002 and 2004, respectively, in the U.S. District Court for the Eastern District of New York.

Both made allegations under the federal False Claims Act. Tirado's action also alleged violations of the New York False Claims Act.

"Those who defraud and jeopardize the nation's vital, federally funded health care programs will be aggressively investigated and held to account," Brooklyn U.S. Attorney Benton J. Campbell said in a statement.

"Only by ensuring that the billing and cost guidelines of Medicare and Medicaid are scrupulously followed can we have confidence that affordable health care will continue to be available for those in need," he added.

Tirado, the hospital's former director of chemical dependency services, alleged in his suit that SIUH fraudulently billed Medicare and Medicaid for detoxification care from 1994 to 2000.

Under the provisions of both the federal and state false-claims laws, private citizens can file suit on behalf of the government in contract fraud cases and share in any consequent settlement or court award.

Prosecutors said SIUH agreed to settle the suit by paying the federal government $11.8 million and the New York state government $14.8 million. Tirado's share of the proceeds comes to $5.3 million.

Ryan's suit involved fraudulent claims for cancer radiation treatments sent to Medicare, Medicaid and the U.S. military's health plan, Tricare, from 1996 to 2004. Ryan is the widow of a cancer victim who was treated at SIUH..

Her complaint alleged SIUH knowingly used incorrect billing codes to bill the government for stereotactic body radiosurgery, a radiation procedure that is designated as investigational and thus not reimbursable under the health programs' rules.

Prosecutors said SIUH would pay the federal government $35 million to settle Ryan's suit. They said Ryan will receive $3.75 million as her share of the settlement.

The hospital also entered into a $35.7 million pre-suit settlement with the federal government over claims that it deliberately inflated Medicare administrative costs related to training for physician residents from 1996 to 2003, according to prosecutors.

Finally, SIUH will pay the federal government $1.4 million in a separate pre-suit settlement related to improper Medicare and Medicaid billings involving some psychiatric patients.

"The resolution of these claims against SIUH demonstrates the federal government's continuing commitment to protect federally funded health care programs from any and all attempts by those who would knowingly seek improper payments," Assistant U.S. Attorney General Gregory G. Kansas said in a statement.

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