Attorney General Eric T. Schneiderman alleged that NY Downtown Hospital entered into an illegal patient referral arrangement with SpecialCare Hospital Management Corporation, a for-profit vendor based in Missouri. The AG claimed this arrangement was disguised as an administrative services agreement, under which the hospital agreed to pay the vendor $38,500 per month in exchange for the referral of Medicaid patients to an unlicensed inpatient detoxification unit.
The AG also charged NY Downtown Hospital with marketing and providing inpatient detox services without an operating certificate and that such services were not medically necessary. The hospital and SpecialCare were also charged with violating federal and state antikickback laws for its alleged referral of patients in exchange for a monetary fee.
Of the hospital’s settlement, more than $12.6 million will be returned to the Medicaid program, and $800,000 will go to the Medicare program.
The time span of the alleged activity was not included in the release.
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