New York hospital says patient fraudulently kept $1.5M insurance payment

Westchester Medical Center in Valhalla, N.Y., recently filed a lawsuit against a patient who allegedly improperly retained $1.5 million in insurance payments that should have been sent to the hospital, according to the Westchester County Business Journal.

Here are seven things to know:

1. In 2011, Barbara Lucena was treated at Westchester Medical Center for 10 days and her baby was treated at the hospital for 109 days.

2. After Ms. Lucena and her baby were discharged, the hospital billed Empire Blue Cross Blue Shield, Ms. Lucena's insurance provider. Empire sent the payments, totaling $1,516,914, directly to Ms. Lucena. She allegedly cashed the checks instead of forwarding the payments to Westchester Medical Center.

3. The hospital sued Ms. Lucena in Westchester Supreme Court to recover the payments. In 2012, the court awarded the hospital a default judgment of $1.55 million. Since the judgment was entered, the hospital has collected $6,731 from Ms. Lucena, which was paid about five years ago, according to the report.

4. In 2016, Ms. Lucena filed for Chapter 7 bankruptcy. Ms. Lucena's debts were discharged, and the bankruptcy case was closed in January 2017. Westchester Medical Center alleges Ms. Lucena intentionally failed to notify the hospital when she filed for bankruptcy in an attempt to keep the hospital from appearing in the proceedings.

5. Although Ms. Lucena named Westchester Medical Center as a creditor in the bankruptcy case, she listed the wrong address, according to the hospital's complaint filed Sept. 9. She also allegedly incorrectly listed her debt to the hospital as less than $2,000.

6. The court reopened Ms. Lucena's bankruptcy case this year at the request of Westchester Medical Center and allowed the hospital to file an adversary proceeding. The hospital claims Ms. Lucena obtained the insurance payments by fraud; therefore, her debt should not have been canceled.

7. Simon Haysom, Ms. Lucena's attorney, said his client regrets retaining the insurance checks. However, he said if Westchester Medical Center decides to litigate for fraud, the hospital "will have to litigate the appalling results of my client's treatment in June 2011," according to the report. Mr. Haysom claims the hospital has avoided liability over the years because his client missed the 90-day deadline for filing a medical malpractice lawsuit against the hospital.

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