$6.8M Settlement With Feds In New York-Presbyterian Hudson Valley Hospital Kickback Scandal

CORTLANDT MANOR, NY — Kickback scandal at a Hudson Valley hospital has resulted in a multimillion-dollar settlement with the feds.

New York-Presbyterian Hudson Valley Hospital repeatedly paid kickbacks to a Westchester County oncology practice that referred Medicare and Medicaid patients to the hospital without a proper justification for the payments, according to the U.S. government,.

United States Attorney for the Southern District of New York, Jay Clayton, and Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services Office of the Inspector General, Naomi D. Gruchacz, announced today that the United States has filed and settled a healthcare fraud lawsuit against New York-Presbyterian Hudson Valley Hospita, which, prior to 2015, was known as Hudson Valley Hospital Center.

The settlement resolves allegations that the hospital improperly paid millions of dollars to a Westchester-based oncology practice to induce patient referrals to the hospital, which the hospital then billed to Medicare and Medicaid.

"Hospitals and physicians are expected to make medical decisions based on the needs of their patients, not improper financial arrangements," Clayton said. "When hospitals provide improper payments to induce patient referrals, they compromise the integrity of federal healthcare programs that serve New Yorkers. We cannot afford corruption in our healthcare industry."

In 2011 and 2012, the hospital entered into three contracts with the oncology practice, according to the federal com-plaint. The contracts promised the hospital would pay hundreds of thousands of dollars per year to the oncology opractice in exchange for, among other things, work on a proposed melanoma center, work on a proposed breast cancer center, and the development and management of an intraoperative radiation therapy program.

After entering into the agreements, the hospital made millions of dollars in payments to the oncology practice. But, many of these payments were not made in exchange for the services identified, according to federal investigators. Instead, the oncology practice frequently failed to perform or document the central services identified in the agreements, according to the DOJ. All the while, the hospital continued to receive referrals from the oncology practice that generated millions of dollars in reimbursements from Medicare and Medicaid, according to the complaint.

"Violations of the Anti-Kickback Statute, like those alleged in this case, can improperly influence referral decisions and undermine the integrity of federal health care programs," Special Agent in Charge Gruchacz said. "HHS-OIG is committed to safeguarding the integrity of federal health care programs and ensuring that provider decisions are not compromised by inducements."

Under the settlement approved today by a U.S. District Judge, the hospital agreed to pay a total sum of $6,836,764.30 plus interest, with $6,469,410.32 to be paid to the United States and the remainder to be paid to New York State.

New York Attorney General Letitia James announced that her offices has secured over $616,000 from New York-Presbyterian Hudson Valley Hospital to settle accusations that it violated the law by making illegal kickback payments to the Westchester County oncology practice in exchange for its doctors referring approximately 114 patients to the hospital.

"New Yorkers should be able to trust that their doctors are making decisions based on their best interests, not financial incentives," James said. "HVH’s illegal kickback scheme undermined cancer patients’ critical relationships with their health care providers. I will continue to go after illegal financial schemes that corrupt our health care system and prevent patients from getting the care they deserve."

As part of the settlement, the hospital also admitted and accepted responsibility for certain conduct alleged in the complaint, including that the hospital paid the oncology practice over $4 million for work that was either not performed or not performed as called for in the agreements, or for which the hospital lacks any time records.