City to Pay $1.375 Million in Whistleblower Deal
New York City will pay $1.375 million to settle a federal whistleblower action asserting that the city's Education Department submitted false Medicaid claims for special education students.
The settlement, announced Monday, relates to an arrangement in which Medicaid paid the city's Department of Education $233 per student for twice-monthly counseling sessions. But the federal government said that from 2001 to 2004, the education department knowingly billed Medicaid for counseling services while offering less than two sessions a month.
Dana Ohlmeyer, a counseling provider in the city school system, filed the case in 2007 under qui tam provisions of the False Claims Act. The federal government intervened in the suit in 2012.
The parties submitted the stipulation of settlement in Ohlmeyer ex rel. United States of America v. City of New York, 07-cv-01517, on Friday. Eastern District Judge Pamela Chen approved the pact Monday.
The settlement noted it is "neither an admission of liability by [New York City] nor a concession by the United States that its claims are not well founded."
Ohlmeyer will get 15 percent of the settlement—$206,250— and the city will also pay her $40,000 legal fees.
"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," Eastern District U.S. Attorney Loretta Lynch said in a statement.
Eastern District Assistant U.S. Attorney Michael Goldberger and Robert DeConti, assistant inspector general for legal affairs in the U.S. Department of Health and Human Services' Officer of Counsel to the Inspector General represented the federal government.
"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," said Assistant Corporation Counsel Stephen Kitzinger who represented the city. Ross Brooks of Sanford Heisler represented Ohlmeyer.