Hospital to pay $3M over improper billing charges

Cayuga Medical Center in Ithaca, N.Y., will pay more than $3 million to settle claims that it improperly billed Medicare and Medicaid, the U.S. Department of Justice announced Wednesday. The medical center allegedly submitted false claims relating to physician recruitment agreements with various medical practices that violated federal law.

Under the settlement, that state of New York will receive $426,305 while federal healthcare programs will recoup $3,149,751.00, according to the DOJ.

The settlement stems from a whistleblower complaint filed by plastic surgeon Daniel Jorgenson, in which he accused the hospital of billing Medicare and Medicaid when several recruitment agreements did not comply with the Stark Law. The DOJ said Jorgenson will get 18 percent of the recovery (about $567,000).

Even though the investigation found no evidence of fraud or abuse, the hospital decided to settle with the federal government to avoid continuing litigation costs, Cayuga Medical Center President and CEO Rob Mackenzie said in a statement.

To remain in compliance, the hospital has modified a regulation so that loans to physicians joining an existing practice would not include any portion of that practice's overhead, unless new space or staff was added.

To learn more:
- here's the DoJ announcement (.pdf)
- read the hospital statement

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