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Research Foundation Agrees to Settle False Claims Act Case

According to the Department of Justice, the State University of New York’s Research Foundation (“Research Foundation”) has agreed to settle claims brought by five whistleblowers in a qui tam lawsuit filed in 2010 under the False Claims Act that it knowingly submitted false statements to the federal government.  According to the Justice Department, the allegations relate to audits done by the Research Foundation on federally funded health care programs in New York State, such as Medicaid, and the Children’s Health Insurance Program.

According to the government, the Research Foundation is a not-for-profit company that supports research for the State University of New York.  The allegations relate to a contract between a Research Foundation program, the Center for Development of Human Services (“CDHS”), and the New York State Department of Health to provide reports to the federal government about eligibility for the state’s Medicaid and Children’s Health Insurance Programs.  Specifically, it was alleged by the whistleblowers that CDHS  manipulated audits it performed by pre-screening the cases and determining which cases to include in the audit, rather than using a random sampling as was intended.

According to the government, CDHS acknowledged in the settlement agreement that it submitted false statements about New York State’s eligibility error rates to the Centers for Medicare and Medicaid Services.  According to the complaint, CDHS falsely reported that there was an error rate in the Medicaid program of less than the maximum allowed rate of three percent, when in reality, the error rate exceeded twenty percent.

The whistleblowers, five former employees of the Research Foundation, filed a complaint under the qui tam provisions of the False Claims Act in 2010.  In the complaint, three of the former employees alleged they were retaliated against after challenging directives from their managers to alter data.

The Research Foundation has agreed to pay $3.75 million to settle the whistleblowers’ and government’s claims.

The whistleblowers, Ava Dock, Patricia Monks, Patrick Campion, Carol Mousseau, and James Ryan will share in $825,000 as their reward under the qui tam provisions of the False Claims Act.

To learn more about the False Claims Act, click here to watch our video What is the False Claims Act?