“The city has cooperated fully with the U.S. attorney's investigation, but we strongly disagree with the allegations, which we believe involve technical billing issues, not fraud,” the city's law department said in a statement.
“The Health Department acted appropriately and all services billed were authorized and provided.”
CSC spokesman Richard Adamonis said in a statement the company is confident it did not submit any claims to Medicaid for which New York was not entitled to payment. “We believe there is no factual or legal basis to support virtually all the allegations of which we have been made aware during the course of the inquiry, and that the complaint is without merit,” Adamonis said. “CSC will vigorously defend itself.”
The alleged fraud involved the state's early intervention program services to children under the age of 3 with developmental delays or medical conditions likely to cause delays. For children receiving the services in New York City, the city is responsible for processing and paying claims submitted by service providers and then seeking coverage from private insurers or Medicaid or billing New York State for its 49% share of the costs not covered by private insurance or Medicaid.
The city contracted with Computer Sciences to process service-provider claims and then seek coverage from private insurers, Medicaid or the state. In hopes of minimizing its own costs, the city then offered the company financial incentives to exceed certain targets for Medicaid payments and imposed penalties when the company didn't meet the city's goals for Medicaid payments, according to the U.S. attorney's office.
The government alleges the city and Computer Sciences then implemented fraudulent schemes using computer programs that automatically altered billing data to meet those goals.
“As alleged, CSC and the City created computer programs that systematically, and fraudulently, altered billing data in order to get paid by Medicaid as quickly as possible and as much as possible,” Bharara said in a statement. “Billing frauds like those alleged undermine the integrity of public healthcare programs like Medicaid.”
A whistle-blower, Vincent Forcier, triggered the federal investigation with a lawsuit filed under the False Claims Act. In successful cases, whistle-blowers are entitled to a percentage of whatever the government is able to recover.
Follow Lisa Schencker on Twitter: @lschencker