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Hospital Agrees to Settle Kickback Claims

The U.S. Department of Justice announced that Westchester County Health Care Corporation d/b/a Westchester Medical Center (“WMC”) has agreed to settle allegations first raised by a whistleblower that it violated the Anti-Kickback Statute, the Stark Law, and the False Claims Act. According to the U.S. Attorney for New York, WMC will pay $18.8 million in settlement of the claims.

According to the government, WMC, the clinical affiliate of New York Medical College, operates a tertiary and quaternary care hospital in Valhalla, New York. Tertiary care is the most specialized form of healthcare involving sophisticated technology and medical specialists. Tertiary care may include complex surgery, such as neurosurgery, cardiac surgery, plastic surgery, and organ transplantation, as well as neonatology, psychiatry, cancer care, and intensive care. Quaternary care may involve experimental treatments and procedures.

In 2006, whistleblower Dan Bisk, a resident of Westchester County, New York and former compliance officer for WMC, filed a complaint under the qui tam provisions of the False Claims Act. Mr. Bisk passed away in 2009 while the case was pending. His wife pursued the case on his behalf after his death. According to the complaint filed by the whistleblower and the complaint-in-intervention filed by the government, WMC violated the Anti-Kickback Statute and the Stark Law in connection with its relationship with Cardiology Consultants of Westchester, P.A. (“CCW”).

According to the complaint-in-intervention, from approximately January 2001 to December 2007, WMC advanced monies to CCW to open a practice for the express purpose of generating referrals to the hospital. The government alleged that when CCW began “repaying” WMC, WMC entered into retroactive, no-work consulting agreements pursuant to which it paid CCW tens of thousands of dollars and it allowed CCW to use WMC’s fellows in CCW’s private office free-of-charge. According to the Justice Department, this arrangement was violative of the Anti-Kickback Statute and the Stark Law. The government also alleges that claims submitted to Medicare for services rendered to patients referred to WMC by CCW violated the False Claims Act.

According to the Justice Department, WMC will pay $18.8 million to settle the allegations. The estate of the whistleblower will receive approximately $3.71 million of the settlement proceeds as a reward under the qui tam provisions of the False Claims Act.

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