The outcome of a recent Medicaid whistleblower lawsuit against Mount Sinai Hospital system in New York City has resulted in the healthcare system paying $2.95 million to settle a lawsuit.

According to Federal and New York State prosecutors, the hospitals and their former parent company admitted to the allegations that they grossly exceeded the 60-day repayment requirement for Medicare overpayments that they received.

The Medicaid whistleblower lawsuit is a qui tam action that took place as the result of a relator (whistleblower) filing a False Claims Act lawsuit against the hospitals alleging that fraud against the government had been committed.

The Medicaid whistleblower lawsuit names Mount Sinai Saint Luke’s, Mount Sinai Beth Israel and Mount Sinai Roosevelt as well as Continuum Health Partners of failing to repay Medicaid for more than $800,000 in Medicaid overpayments.

According to authorities, Continuum was made aware of the potential overpayments from Medicaid in 2011, and was required to submit the overpayments back to Medicaid within 60 days. Instead, Continuum repaid Medicaid in full in 2013, more than two full years after becoming aware of the issue.

The Medicaid whistleblower lawsuit alleged that Continuum and the hospitals submitted a total of 444 claims to Medicaid during 2009 and 2010 as the result of the software error in their system. This was supposedly brought to their attention in 2010 by the office of the New York State Comptroller.

An internal investigation conducted by Continuum in February 2011 found approximately 900 potential claims that had been erroneously submitted to Medicaid, totaling more than $1 million.

These potential claims were apparently compiled by an employee of the company into a list, but according to the investigation, Continuum fired the employee and never came forth to the Government about the financial errors, taking two years to complete the Medicaid repayments.

The employee who was fired by Continuum eventually went on to file the qui tam Medicaid whistleblower lawsuit.

After attempts to have the Medicaid whistleblower lawsuit dismissed in 2014, the Defendants were unsuccessful. U.S. District Judge Edgardo Ramos denied the motion and said that the Medicaid whistleblower lawsuit had serious implications for cases brought under the False Claims Act.

Unlike many settlements that do not include admissions of wrongdoing, this Medicaid whistleblower lawsuit settlement included statements by the Defendants saying that there was a software glitch, that they were made aware of faulty claims in 2010, that the relator in the lawsuit submitted a list of the faulty claims in February 2011 and was fired shortly thereafter and they also admitted that they did not remit full payment to Medicaid until March 2013.

Though the exact amount of the payment to the whistleblower was not stated as part of the settlement, whistleblowers who file a lawsuit on behalf of the government alleging fraud against the government typically receive between 15 and 30% of the total settlement.

Based on these percentages, it is estimated that the relator who filed the Medicaid whistleblower lawsuit will receive between $450,000 and $900,000 for his work in helping to combat fraud against the government.