The office of Preet Bharara, the United States attorney for the Southern District of New York, said on Monday that the city’s Department of Health and Mental Hygiene and the contractor, Computer Sciences Corporation, created schemes from 2008 through 2012 that would produce reimbursements on tens of thousands of false claims for early intervention program services for infants and toddlers.
In one scheme, the city and the firm switched diagnosis codes on children, using a default code — 315.9, which designates an “unspecified delay in development” — that Medicaid would approve, the prosecutor’s office said.
Other schemes were intended to circumvent Medicaid rules that required the city and the computer firm to exhaust private insurance coverage before billing Medicaid, Mr. Bharara’s office said.
If the city did not have adequate insurance information from the patient, it would not make any effort to find the correct policy information, the office said. Instead, a computer program was created that would insert 999-999-999 as the purported policy number. Private insurers would quickly reject the claims, freeing the city to submit them to Medicaid.
The lawsuit, which follows a whistle-blower’s complaint, was filed under the False Claims Act. The lawsuit demands triple damages and penalties, but does not specify how much it is seeking. But in just one four-day period in April 2009, the lawsuit claims that the false diagnosis data was used on more than 600,000 claims, resulting in a $49 million payment from Medicaid to the city.
Mr. Bharara, in a statement, said that Computer Sciences Corporation and the city had “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.”
New York State joined in the whistle-blower lawsuit, making its claim only against Computer Sciences Corporation.
A spokesman for the city’s Law Department said the city had “cooperated fully” with the federal investigation.
“But we strongly disagree with the allegations, which we believe involve technical billing issues, not fraud,” the Law Department said. “The health department acted appropriately and all services billed were authorized and provided.”
