One of New York State’s largest cancer centers has agreed to pay $5.5 million to settle a false Medicare claims lawsuit brought by a former employee under the Federal False Claims Act.

According to the false Medicare claims lawsuit, Hudson Valley Hematology-Oncology Associates, R.L.L.P. fraudulently billed Medicare and Medicaid for copayments which it routinely waived.

Court documents note that Hudson Valley admitted to routinely waiving patient copayments for Evaluation and Management codes without an “individualized determination of financial hardship or exhaustion of reasonable collection efforts.”

The scheme revolved around routinely scheduled patient services such as injections, chemotherapy and venipunctures.

In addition to these services, the practice would bill for the Evaluation and Management services without documenting a significant and separately identifiable service in addition to the routinely scheduled service.

As a way to avoid patient concerns, the practice would bill Medicare for the services but waive the patient’s’ financial responsibility.

Thus, the practice would be reimbursed for the Evaluation and Management codes in addition to the routine services.

Cancer Center Routinely Waived Copays

Medicare requires patients to pay various amount of copays and/or coinsurance. According to the false Medicare claims lawsuit, “when providers, practitioners or suppliers forgive financial obligations for reasons other than genuine financial hardship of the particular patient, they may be unlawfully inducing that patient to purchase items or services from them.”

Most compliance and billing programs are aware of this danger, and have policies and procedures in place to ensure copay waivers are based on a good faith financial hardship and a good faith effort to collect from patients when no such financial hardship exists.

However, in this case, Hudson Valley routinely waived copayments for various reasons, including for individuals who sought frequent medical services from Hudson Valley, had a high balance, whose insurance did not pay certain amounts, or who expressed an inability to pay. None of these reasons was an allowable exception.

Additionally, Hudson Valley consistently waived the copayments without receiving any supporting documentation or additional information from the patients.

“Hudson Valley’s practice of waiving patient co-pays without making an individualized determination of financial hardship or exhausting reasonable collection efforts” violated the federal Anti-Kickback Statute, a law that prohibits the “payment of kickbacks in any form to protect the Medicare and Medicaid programs because remuneration can influence health care decisions that would result in services being provided that are medically unnecessary, of poor quality, or even harmful to a vulnerable patient population.”

The government’s involvement in the Hudson Valley false Medicare claims lawsuit was brought about through a whistleblower in 2014 under the False Claims Act.

The whistleblower in this case was a former Accounts Receivable Representative at Hudson Valley, responsible for coding and charge entry for billing purposes.

Under the Federal False Claims Act, the U.S. government is able to recover money it wrongfully paid as a result of fraudulent conduct and allows individuals who learn of unlawful conduct to bring a false Medicare claims lawsuit in the name of the government.

Filing a False Medicare Claims Lawsuit

In a whistleblower lawsuit, an individual with knowledge of an organization’s activities provides information about fraud, corruption or other illegal activity. Whistleblowers are often employees, former employees and others who have access to company documents and internal information.

Whether you have evidence of fraud against the government or corruption at a private company, an experienced whistleblower attorney can investigate your claim and advise you on your legal options.

The Hudson Valley False Medicare Claims Lawsuit is Case No. 7:14-cv-02653, in the U.S. District Court for the Southern District of New York.