Hospitals to pay $2.3M for alleged Medicaid overbilling, drug profits

New York State is no stranger to Medicaid billing problems. Last year, the City of New York paid $70 million for overbilling the program by improperly approving home care for Medicaid patients. Now, two Westchester County hospitals will pay $2.3 million to settle claims they overbilled Medicaid for physician-administered drugs, Attorney General Eric T. Schneiderman announced Wednesday.

Sound Shore Medical Center of Westchester will repay $2.2 million, while Mount Vernon Hospital already has paid $85,497.50.

The investigation by the Attorney General's Medicaid Fraud Control Unit found that the two Sound Shore Health System hospitals billed Medicaid beyond the cost of the drugs and made more than $1 million in profit. However, state law prohibits hospitals and doctors from turning a profit on drugs they administer.

Although the hospitals neither admitted nor denied intentional wrongdoing, they agreed to pay twice the amount allegedly defrauded, plus interest, The Journal News reported.

So far, the state Medicaid Fraud Control Unit has recovered more than $19.9 million from more than 145 New York providers, including hospitals, physician group practices and individual doctors, according to the Attorney General's office.

However, some healthcare leaders are questioning whether billing mistakes should be considered fraud. "A label of fraud is really not accurate and can discredit the institution in the community," Northern Metropolitan Hospital Association President and CEO Kevin Dahill told the Journal News. "Hospitals participate in these audits and agree to the findings. If they make mistakes, they correct them. That's not fraud," he said.

To learn more:
- here's the AG statement
- read the Journal News article

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