Park Avenue Medical Associates Settles Medicare Fraud Claims for $1M

New York-based Park Avenue Medical Associates, P.C., Park Avenue Health Care Management LLC, and Park Avenue Health Care Management, Inc. (collectively “PAMA”) have agreed to pay $1 million to resolve allegations that the companies knowingly submitted or caused the submission of false claims to Medicare, the U.S. Department of Justice announced last month.

Medicare prohibits payment for services that are not “reasonable and necessary” for the diagnosis or treatment of an illness or injury, as well as payment for any claim without adequate documentation substantiating the reasonableness and necessity of the services provided.  In particular, Medicare does not cover psychotherapy services rendered to patients with Alzheimer’s disease or dementia unless the patient’s dementia is mild, the patient has the capacity to recall what occurred at the therapy from one session to the next, and that capacity is documented in the patient’s record.  Psychotherapy services are not covered when dementia has produced a severe enough cognitive defect to prevent psychotherapy from being effective. In addition, Medicare provides that psychiatric diagnostic examinations are covered only once for each episode of illness or suspected illness in a patient.

In violation of Medicare policies, as well as its own policies, PAMA provided psychotherapy to patients who, because of their severe dementia, lacked the capacity to benefit from it.  In addition, PAMA billed for psychiatric evaluations that were duplicative, failed to comply with Medicare rules, and reflected a lack of coordination of care both among PAMA’s own psychiatrists, psychologists and nurses, and between PAMA’s employees and staff at the facilities at which PAMA performed services.

PAMA also entered into a Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of the Inspector General, in order to ensure future compliance with Medicare laws and regulations.

The lawsuit was originally filed by Zachary Wolfson, a former PAMA employee, under the whistleblower provisions of the False Claims Act.  The False Claims Act allows private citizens with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Wolfson’s share of the settlement has yet to be determined.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.