4 health care organizations to pay $8M settlement to resolve Medicaid allegations in New York

IndustriesAssociated Press

Three New York hospitals and a health care management company have agreed to an $8 million settlement with state and federal authorities to resolve allegations they illegally billed Medicaid, the state's attorney general announced Monday.

Under the deal, Missouri-based SpecialCare Hospital Management Corp. will pay $6 million. St. Joseph's Medical Center in Yonkers, Columbia Memorial Hospital in Hudson and Benedictine Hospital in Kingston will pay a combined $2 million. The companies admitted no wrongdoing.

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The settlement resolves allegations that the hospitals submitted Medicaid claims for unlicensed and medically unnecessary substance abuse services. SpecialCare was accused of illegally referring patients in exchange for kickbacks.

"Drug and alcohol treatment programs are designed to help vulnerable people struggling with addiction. By exploiting their needs and the Medicaid program in order to maximize revenue, SpecialCare Hospital Management Corporation, St. Joseph's Medical Center, Benedictine Hospital and Columbia Memorial Hospital wasted Medicaid resources," Attorney General Eric Schneiderman said in a statement announcing the settlement.

SpecialCare, Columbia and Benedictine all confirmed the settlement. The two hospitals said in statements that their actions were appropriate but that the settlement was in their best interest.

"The final settlement, while imperfect, represented our best option to bring the matter to a close without incurring the time and expense of further litigation," said William Van Slyke, vice president of marketing and external affairs at Columbia.

Schneiderman's office said the allegations pertained to Medicaid claims filed between 2002 and 2005. The majority of the proceeds from the settlement will be returned to the Medicaid program.