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A.G. Schneiderman Announces $750,000 Joint Settlement With Long Island Pediatrics Practice Resolving Allegations Company Submitted False Claims To Medicaid

NY’s Medicaid Program To Receive Over $450,000 As Part Of Joint State-Federal Settlement

Attorney General Eric T. Schneiderman recently announced a joint state-federal settlement with the Long Island, NY-based pediatrics practice Freed, Kleinberg, Nussbaum, Festa & Kronberg M.D., LLP (Practice), as well as various current and former partner physicians of the Practice, including Arnold W. Scherz, M.D., Mitchell Kleinberg, M.D., Michael Nussbaum, M.D., Robert Festa, M.D., and Jason Kronberg, D.O. (Partners)—doing business as Pediatrics and Adolescent Medicine. The agreement settles allegations that the Practice and Partners did not routinely enroll all of their employee providers treating Medicaid patients in the Medicaid program, and instead used the Partners’ Medicaid provider identification numbers to bill for the treatment of Medicaid beneficiaries by unenrolled employee providers. An investigation conducted by the Attorney General’s office found that the false claims occurred at many of the practice’s Long Island locations. The pediatrics practice has locations in Holbrook, Port Jefferson, Shirley, and Wading River, NY. New York’s Medicaid program will receive $450,000 as part of the $750,000 settlement agreement.

“Providers who are not properly enrolled in Medicaid before treating Medicaid beneficiaries undermine the integrity of the program and its efforts to serve our neediest New Yorkers,” said Attorney General Schneiderman. “Those serving Medicaid beneficiaries must be properly credentialed and thoroughly vetted prior to Medicaid enrollment to ensure that beneficiaries get the care they deserve from qualified professionals.”

Specifically, the settlement agreement resolves allegations that, from July 1, 2004 through December 31, 2010, the Practice and Partners did not enroll all of their provider employees in Medicaid prior to allowing them to treat patients who were Medicaid beneficiaries. Instead, providers employed by the Practice would treat Medicaid patients and bill under the Partners’ Medicaid identification numbers, as if the billing Partners were the ones seeing those patients, even when they had not.

The State contends that this practice caused false or fraudulent claims to be submitted to and reimbursed by the State’s Medicaid program, for services performed by providers who were not enrolled in Medicaid—a direct violation of Medicaid’s regulations.

The settlement resolves allegations asserted in a qui tam action brought by a whistleblower in the United States District Court for the Eastern District of New York. The Attorney General wishes to thank the United States Attorney’s Office for the Eastern District of New York for its assistance in this investigation.

The state case was handled by Principal Auditor Investigator Theresa A. White and Special Assistant Attorney General Diana Elkind. Carolyn Ellis is the Chief of the Civil Enforcement Division. The Attorney General’s Medicaid Fraud Control Unit is led by Director Amy Held and Assistant Deputy Attorney General Paul Mahoney. The Criminal Justice Division is led by Executive Deputy Attorney General Margaret Garnett.