The Daily Caller

The Daily Caller
Empty Classroom (Photo: Getty Images) Empty Classroom (Photo: Getty Images)  

New York City to pay feds $1.37 million settlement for submitting false Medicaid claims

New York City has agreed to pay the federal government $1.37 million to settle a whistle-blower complaint charging that the city’s education department submitted false claims to Medicaid for counseling services to special education students.

“When Medicaid shells out scarce dollars for services that are not provided, both the students in need of psychological support and the public fisc are harmed,” Loretta Lynch, the United States Attorney for the Eastern District of New York, said in a statement.

The complaint, settled this week, charged that New York City’s Department of Education knowingly billed Medicaid for psychological counseling services for individual special education students who did not receive two monthly counseling session, the minimum number required for payment, between 2001 to 2004.

Medicaid pays NYC DOE a flat rate of $233 for each student that goes through two sessions a month. If the student receives fewer than two sessions, the department is not entitled to payment.

Whistle-blower Dana Ohlmeyer, a DOE social worker, brought initial action in 2007 under the provisions of the federal False Claims Act, according to the New York Law Review. In 2012, the United States intervened in the suit.

“We will vigorously pursue entities, including local governmental agencies that seek reimbursement of federal funds to which they are not entitled,” Lynch said.

The city contends that it did nothing wrong and the discrepancies had to do with misplaced documents.

“The settlement was in the best interest of the City,” Stephen Kitzinger, senior counsel in the General Litigation Division of the New York City Law Department, in a statement to The Daily Caller. “We don’t believe there was any wrongdoing. It was simply a matter of being unable to locate certain documentation from 10 or more years ago.”

Pursuant to the whistle-blower provisions of the False Claims Act, Ohlmeyer will receive 15 percent of the settlement amount or $206,250 and the attorney’s fees in the amount of $40,000.

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