CORPORATE CRIME REPORTER
Cabrini
Medical Center to Pay $3.4 Million to Settle False Claims Act Charges
21 Corporate Crime Reporter 14, March 28, 2007
Cabrini Medical Center will pay $3.4 million to resolve civil charges that it
defrauded the New York State Medicaid Program.
Federal officials alleged that Cabrini entered into an illegal scheme with Applied Consulting, Inc.
Under the agreement, Cabrini purported to retain Applied to provide administrative services for Cabrini’s detoxification unit.
But the administrative services were not needed by Cabrini, were never provided by the consulting firm, or were worthless.
The agreement served solely as a cover for payments by Cabrini to Applied in exchange for Applied’s referral of patients to Cabrini.
Such patient-referral payments violate New York State Medicaid regulations and state and federal antikickback statutes.
Federal officials alleged that Cabrini violated the False Claims Act by falsely certifying to the government that it had provided the services in compliance with all applicable laws and regulations.
Cabrini’s conduct was first brought to the attention of the government by a whistle blower who filed suit under the qui tam provision of the False Claims Act, under which a private person, or “relator,” can bring a lawsuit on behalf of the United States.
In addition to the settlement between the United States and Cabrini, the relator has also settled claims he brought against the Missionary Sisters of the Sacred Heart – described in the settlement agreement as Cabrini’s sponsor.
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