November 16, 2011 – Three New York nursing homes agree to repay more than $745,000 to New York State for alleged bed-billing fraud schemes. Whistleblower represented by the qui tam law firm Levy Konigsberg LLP receives a $111,000-plus reward for reporting the nursing homes’ false billing.

Beds for the Dead? LK Qui Tam Whistleblower Attorneys Win One of New York State’s First Medicaid Fraud Cases

Three New York nursing homes agree to repay more than $745,000 to New York State for alleged bed-billing fraud schemes. Whistleblower represented by the qui tam law firm Levy Konigsberg LLP receives a $111,000-plus reward for reporting the nursing homes’ false billing.

NEW YORK, New York, November 16, 2011 – Whistleblower attorneys at the qui tam law firm of Levy Konigsberg LLP (“LK”), have settled one of the first Medicaid fraud whistleblower lawsuits against nursing homes under New York State’s new False Claims Act. The firm’s client, a veteran institutional food service supervisor, received a $111,000-plus reward for helping the State to recover the falsely billed claims, qui tam attorney and law firm co-founder Alan J. Konigsberg announced.

Originally filed under seal in March 2009 and made public with the $745,000-plus settlement yesterday by three New York nursing homes, the State Complaint1 alleges double-billing for patient beds and overcharging, which law firm co-founder Konigsberg said, “could be the 2011 poster child for waste and abuse in the nursing home industry.”

The New York State False Claims Act, which took effect in 2007, mirrors the Federal False Claims Act and allows persons with knowledge and evidence of fraud against the state to file those allegations on behalf of himself and the state, then share in as much as 25 percent of the recovery. New York City has similar legislation.

The New York State Medicaid fraud Complaint filed by Konigsberg, who leads the firm’s qui tam practice, names nursing homes in Forest Hills, Flushing, and College Point, New York.

The settlement covers three years of alleged Medicaid fraud ending in 2008.

According to the Complaint the defendants:

  • Ginned up occupancy rates to bill Medicaid for vacant beds held open for residents who died or were never coming back;
  • Charged Medicaid for more-expensive nursing homes’ dialysis and ventilator floor beds when the patients they placed there needed neither; and
  • Double-billed Medicaid by filling “bed held” spaces which Medicaid had paid for residents returning from short-term hospitalization and putting other patients in the same beds.

Settling the case were:

  • Cliffside Rehabilitation & Residential Health Center (“Cliffside”), a 220-bed facility located at 119-19 Graham Court, Flushing, NY;
  • Forest View Center for Nursing & Rehabilitation (“Forest View”), a 160-bed facility located at 71-20 110th Street, Forest Hills, NY; and
  • Woodcrest Rehabilitation & Residential Center, (“Woodcrest”), at 119-09 26th Avenue, College Point, NY.

The Complaint includes allegations that whistleblower Steven Simon was fired after he urged the facilities to comply with Medicaid regulations. Simon had worked for the defendants for nearly 21 years and had spent more than 50 years in institutional food service. He was fired in May 2008 after complaining to his immediate supervisor, Mrs. Eileen Natividad, about conditions impacting the health and welfare of the patients, according to the Complaint.

In settling with New York State, the three nursing homes have denied the allegations in the Complaint, but have agreed to settle, “to avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of the above claims,” according to the settlement agreement.

“At no time in U.S. history have taxpayers in New York and across the country more needed value for every cent that the government spends,” said Konigsberg. “Our client did the right thing by blowing the whistle and allowing Levy Konigsberg help restore dollars defrauded from the Empire State.”

Konigsberg thanked New York State Attorney General Eric T. Schneiderman and Monica Hickey-Martin, Special Deputy Attorney General in charge of the State’s Medicaid Fraud Control Unit, for their roles in settling this whistleblower case, as well as Assistant Attorney General James Clarke who prosecuted the case.

New York State, New York City, 28 additional states, Chicago, and Allegheny County, Pennsylvania now have their own false claims acts with qui tam provisions that reward whistleblowers who expose fraud and false billing.

The False Claims Acts’ qui tam actions allow private citizens with knowledge of fraud to help the Government recover ill-gotten gains and additional civil penalties. The Acts allow government to collect up to three times the amount it was defrauded, in addition to civil penalties from $5,500 to $11,000 per false claim. In successful qui tam whistleblower lawsuits in which governments intervene, whistleblowers are typically entitled to receive awards representing 15-to-25 percent of the recoveries. Simon was awarded 15 percent, Konigsberg noted.

If you have knowledge and evidence of federal, state or local false billing anywhere in the United States concerning Medicaid or any other government-paid product or service contact a Levy Konigsberg whistleblower lawyer at 212-605-6200, or toll free at 1-800-988-8005.

1 See attached Complaint.

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