Staten Island University Hospital settles one of largest False Claims Act suits against a single hospital

Staten Island University Hospital has committed to pay the United States a colossal amount in settlement of a False Claims Act suit alleging that the hospital defrauded Medicare, Medicaid and the military’s health insurance program, TRICARE. The hospital will also pay the State of New York a sizable sum for damages incurred by the state’s Medicaid program. Claims of the hospital’s fraudulent schemes involved two completely separate types of treatment. From 1994 to 2000, the hospital billed Medicaid and Medicare for inpatient alcohol and substance abuse detoxification treatment to patients in beds for which the hospital had not been granted a certificate of operation from the New York State Office of Alcoholism and Substance Abuse Services. From 1996 through 2004, the hospital defrauded Medicare and TRICARE by knowingly using incorrect billing codes for certain cancer treatments performed at the hospital, thereby receiving reimbursement for services not covered by Medicare or TRICARE.

The federal government and the state of New York learned of the hospital’s fraudulent practices when Dr. Miguel Tirado, a former Director of Chemical Dependency Services, filed a lawsuit under the federal False Claims Act and the New York State False Claims Act, describing the substance abuse scheme. Elizabeth M. Ryan, the widow of a cancer patient, alleged in her False Claims Act suit that the hospital fraudulently billed Medicare for stereotactic body radiosurgery treatment, a regimen for cancer patients that was not approved for reimbursement by Medicare or TRICARE.

Dr. Tirado and Ms. Ryan filed their whistleblower suits under the “qui tam” provision of the federal False Claims Act, which allows a private citizen to institute a claim for fraud on the government’s behalf and to share in any money received. Under that provision, both Dr. Tirado and Ms. Ryan will receive a considerable sum as their share of the U.S. and New York governments’ recoveries.

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