A.G. Schneiderman Recovers Over $700k For Taxpayers In Central New York Medicaid Whistleblower Case

Cayuga Medical Center To Pay For Violating Federal Law

Schneiderman: Today's Settlement Sheds Light On The Practice of Questionable Physician Recruitment Agreements


SYRACUSE - Attorney General Eric T. Schneiderman today announced a settlement with Cayuga Medical Center (CMC) for violating the Stark Act, which prohibits a physician from referring patients to a hospital if the physician has a financial relationship with the hospital, unless an exception applies. In addition, the Stark law also prohibits a hospital from billing Medicaid for a prohibited referral.

"Today's settlement sheds light on the practice of questionable recruitment agreements with physicians." said Attorney General Schneiderman. "Cayuga Medical Center's actions were a violation of the Stark Act which is intended to ensure that physicians' decisions not be influenced by any financial relationship they may have with a hospital.”

Working with the US Attorney’s office for the Northern District of New York, the entire settlement totals $3,149,751.00 in both Medicare and Medicaid damages. The total Medicaid recovery is $710,508, of which New York will receive $426,305.

CMC itself disclosed that certain recruitment agreements with physicians did not comply with the Stark Act.

The whistleblower, or qui tam, lawsuit was filed by Dr. Daniel Jorgenson a plastic surgeon with admitting privileges at Cayuga Medical Center, in 2007 outlining two questionable recruitment agreements with the hospital that violated the Stark Act. As a whistleblower, Dr. Jorgenson will receive 18 percent of the settlement proceeds.

The Attorney General would like to thank the U.S. Attorney’s office for the Northern District of New York, Cayuga Medical Center, and Dr. Jorgenson for their cooperation in this matter. This matter was handled by Counsel to the New York Medicaid Fraud Control Unit, Jay Speers,  and Civil Enforcement Chief Auditor Michael LaCasse, under the supervision of Deputy Attorney General Monica Hickey-Martin, the Director of the Medicaid Fraud Control Unit.

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