New York State and New York City to pay landmark recovery of Medicaid funds

New York State and New York City have agreed to reimburse the federal government for a staggering sum in improper Medicaid claims filed by school districts for speech therapy and other services.  In the 1980s, Medicaid began to assist school districts with the cost of providing services such as speech therapy and psychological counseling to schoolchildren.  Medicaid even assists with the cost of transporting children to therapists’ offices.  New York school districts have been so aggressive in filing such Medicaid claims that one federal study concluded that New York alone accounted for 44 percent of all Medicaid claims for student health services nationwide.

In the late 1990s, Hedy Cirrincione, a speech therapist working near Syracuse, filed lawsuits under the federal False Claims Act alleging that county and school district officials had filed improper claims with Medicaid for services Cirrincione had provided.

Those whistleblower lawsuits prompted several audits by the Department of Health and Human Services.  The audits found substantial potential for fraud in New York City and state programs funding speech therapy and other services.  A vast majority of such Medicaid claims, the audits found, did not meet federal requirements.  Further, the government alleged that, many times, there was no documentation that any therapy or counseling had actually been provided.

In accordance with the Qui Tam provisions of the False Claims Act, Ms. Cirrincione, the whistleblower, will receive a substantial sum from the government’s settlement under a set formula. 

For the full story, go to the New York Times.