Manhattan U.S. Attorney Settles Civil Fraud Claims Against Westchester Medical Center Arising From Its Violations Of The Anti-Kickback Statute

Written By: Robert Cox

NEW YORK, NY — The United States has settled civil fraud claims under the False Claims Act against Westchester Medical Center related to alleged violations of the Anti-Kickback Statute and the Stark Law and submission of costs reports to Medicare seeking reimbursement for charges Westchester Medical Center did not incur.  In connection with the settlement, which was approved by U.S. District Judge Lewis A. Kaplan on May 14, 2015, the defendant agreed to pay a total of $18,800,000 to resolve its liabilities, and made admissions as to its conduct. 

 “The conduct of Westchester Medical Center is the reason the Anti-Kickback Statute and the Stark Law are so important – they are laws that help to rid the healthcare industry of conflicts that can improperly influence medical judgment, potentially jeopardizing patient care and causing federal healthcare programs to pay for excessive or unnecessary treatments,” said Manhattan U.S. Attorney Preet Bharara. “Hospitals and medical practices have an obligation to patients, and taxpayers, to ensure their arrangements conform to the requirements of these laws.”

“Westchester Medical Center’s aggressive, intricate kickbacks and other fraud schemes in this case threatened the impartiality of medical referrals, the financial integrity of Medicare, and the public’s trust in the health care system,” said HHS-OIG Special Agent in Charge Scott J. Lampert . “Our agency will continue to investigate those who seek to cheat federal health care programs.”

“Westchester Medical Center participated in a coordinated shakedown of Medicare and, by extension, taxpayers,” said FBI Assistant Director-in-Charge Diego Rodriguez. ”Today, they agreed to pay more than $18 million to resolve their liabilities and enable this government program to serve the seniors it was designed to help.”

Under the settlement, Westchester Medical Center admits that from approximately 2000 through 2007, Westchester Medical Center maintained a financial relationship with Cardiology Consultants of Westchester, a cardiology practice formerly operating on Westchester Medical Center’s Valhalla campus, which violated the Anti-Kickback Statute and the Stark Law. Westchester Medical Center advanced monies to Cardiology Consultants of Westchester to open a practice for the express purpose of generating referrals to the hospital.

The Anti-Kickback Statute makes it illegal for a hospital to knowingly and willfully offer or pay remuneration to any person to induce that person to purchase, order, or recommend purchasing or ordering any good or item for which payment may be made under a federal health care program.

The Stark Law provides that the government will not pay for certain designated health services prescribed by physicians who have improper financial relationships with entities to whom they refer patients because such financial relationships can compromise the physicians’ professional judgment as to whether a service is medically necessary, safe, effective, and of good quality.

The case is being handled by the Office’s Civil Frauds Unit.  Assistant United States Attorneys Rebecca C. Martin and Christine Schessler Poscablo are in charge of the case.