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New York Health Care Providers Pay $14.7 Million To Settle Fraudulent Medicare Billing Charges


A pair of New York health care providers agreed last week to pay the United States Justice Department over $14.7 million in fines to resolve allegations that it submitted fraudulent claims to federally-funded health care programs.

Health Quest Systems, Inc. and its subsidiary Putnam Health Center (PHC) stood accused by federal prosecutors of submitting improper claims in three broad manners. Per prosecutors, Health Quest submitted claims for evaluation and management services beginning in the spring of 2009 that failed to include documentation supporting the level of services billed, which investigators say was two levels beyond that which could be supported by the documentation provided. They say the last instance of such a practice was in the summer of 2015.

Investigators say Health Quest submitted claims for home health services that lacked the appropriate documentation between the spring of 2011 and the summer of 2014, including failing to document face-to-face physician visits.

Finally, investigators say between March and December 2014, PHC submitted false claims for inpatient and outpatient services referred to them by orthopedic surgeons who had direct financial relationships with the PHC. Investigators argued that the claims were inflated beyond the fair-market value of such services, and such referrals, whether inflated or not, were in violation of the Physician Self-Referral Law (a/k/a, the “Stark Law”), which prohibits physicians from billing to Medicare for certain services referred to hospitals by physicians with whom they have improper compensation arrangements.

In addition to federal fines, the companies in question will also pay $895,427 in fines to the New York state government. The entire action is the result of a trio of lawsuits brought by former employees under the whistleblower provision of the False Claims Act (a/k/a the “Lincoln Law”), which the Justice Department pursued after investigating the allegations.

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