Mount Sinai: A Call to Whistleblowers with Knowledge of Fraud at Mount Sinai

The NY whistleblower law firm Halperin Bikel is seeking current and former employees of Mount Sinai Health System, Continuum Health Partners, and their many affiliated entities, who have knowledge of ongoing healthcare violations, including fraud against the Medicare and Medicaid systems.

Mount Sinai has a record of fraudulent billing that has victimized essential programs providing a medical safety net for the elderly and poor. But, we fear what has been revealed may only be the tip of the iceberg.

We hope that someone with inside knowledge of abuse will come forward, and we can help them claim a generous financial reward for doing so.

The federal False Claims Act (FCA) allows private citizens who know of Medicaid and Medicare fraud to come forward and claim a reward for their service. New York State has its own False Claims Act, which mirrors the federal law, but also provides more robust protections against retaliation.

If you know about fraudulent activity that bilks government programs intended for our most vulnerable citizens, now is the time to come forward and help right this wrong.

Our attorneys are determined to protect your rights and recover whatever cash awards are possible for the information you supply.  

How New York State and Federal Whistleblowing Laws Work

The federal FCA goes back to the Civil War when contractors for the U.S. Army were undermining the war effort by fraudulently charging the government for goods and services never provided.

Known then as the Lincoln Law, the FCA allowed a private citizen with insider knowledge to bring a lawsuit on behalf of the government and share in the government’s recovery. The action is called a qui tam suit, after a Latin phrase indicating the plaintiff is suing for someone else.

New York’s False Claims Act operates on a similar principle, but has many advantages over the federal law. The state law has a 10-year statute of limitations, rather than the usual six years under the federal statute, making it easier for former employees to come forward.

The state law also permits a case to go forward on less specific allegations, so the plaintiff does not need to have records in his or her possession. Once the case is filed, prosecutors have subpoena power and can access records to support the allegations.

Both the federal False Claims Act and the New York State False Claims Act laws allow a whistleblower to receive a reward based on a percentage of the government’s recovery. The percentage varies, but tends to range between 15 and 30 percent. Cases often lead to multi-million-dollar recoveries, so the qui tam plaintiff’s bounty is substantial. If there are multiple whistleblowers, they must share the pool but note the first to file a claim has a massive advantage and might usurp the total award. Act quickly to preserve your rights.

History of Mount Sinai Health System

Beginning as the New York Eye and Ear Infirmary of Mount Sinai in 1820, the Mount Sinai Health System has grown to be a global leader in medical care, research, and medical education across a range of specialties.

After a merger with Continuum Health Partners in 2013, the system can boast of eight hospital campuses in the New York metropolitan area:

  • The Mount Sinai Hospital
  • New York Eye and Ear Infirmary of Mount Sinai
  • Mount Sinai West (formerly Mount Sinai Roosevelt)
  • Mount Sinai South Nassau
  • Mount Sinai Queens
  • Mount Sinai Morningside
  • Mount Sinai Brooklyn
  • Mount Sinai Beth Israel

Other facilities include the Icahn School of Medicine, 13 free-standing joint-venture centers, and more than 400 ambulatory practice locations throughout the five boroughs of New York City, Westchester, and Long Island.

The system employs more than 42,00 workers, including 7,200 physicians, comprising general practitioners and specialists. Annually, the system handles more 150,000 cases on an inpatient basis, almost 3.5 million outpatient visits, and more than half a million Emergency Department visits.

The Mount Sinai Health System asserts that its mission is,

“To provide compassionate patient care with seamless coordination and to advance medicine through unrivaled education, research, and outreach in the many diverse communities we serve.”

The system’s aggressive branding claims:

“We reimagine what is possible and redefine the practice of modern medicine, both in our local community and across the world, in order to produce the only result that really matters: radically better outcomes for our patients.”

Through its official statements, the Mount Sinai Health System seems determined to prove the company does healthcare differently—that is, exceptionally well. Unfortunately, its behavior often runs contrary to the image of integrity it tries to cultivate.   

Mount Sinai is a serial offender when it comes overbilling in violation of the False Claim Act. What follows is a brief summary of recent cases and settlements the system was compelled to make.

Mount Sinai forced to settle False Claims Act allegations for $4.4 million

In 2013, two Mount Sinai employees, Joseph Gaston and Xiomary Ortiz, filed suit alleging that Mount Sinai Hospital, the Icahn School of Medicine at Mount Sinai and Mount Sinai Radiology Associates violated the federal False Claims Act and New York State False Claims Act by:

  • Billing for services never performed
  • Billing multiple times for the same services
  • Retaining overpayments received from improper billing

The violations were alleged to have occurred from at least 2001 to at least the end of 2010.

Mount Sinai’s argument in its defense was flimsy from the start. The system urged the court to dismiss the case because the qui tam plaintiffs had based their allegations on confidential patient records they had misappropriated. The system also asserted that those records could not substantiate the level of fraud that gives rise to an FCA claim.

One of the scams the plaintiffs alleged was "doctor swapping," a scheme where bills appear in the name of a doctor who did not provide the service. The apparent purpose of this scheme was to fraudulently conceal from the government that radiologists who were not enrolled in Medicare or Medicaid had performed certain services billed to those programs. 

Other fraudulent acts included  “upcoding,”  a term for overstating diagnoses and procedures via the billing codes. The plaintiffs alleged they had brought the problem to the attention of higher-ups at Mount Sinai, who had done nothing to rectify the problem.

Then, in June  2014, the US Department of Justice intervened in the lawsuit, adding its own charge of malfeasance. Under the Affordable Care Act, a “reverse false claims act violation” occurs when the government inadvertently overpays on a Medicare or Medicaid claim, and the recipient of the overpayment does not return the overcharge within the 60 days allowed by law. The DOJ alleged that Mount Sinai had failed to return overpayments amounting to hundreds of thousands of dollars.

In October 2016, Mount Sinai Hospital moved to have the whole case dismissed, arguing before a New York federal appeals judge that the misidentification of radiology service providers wasn’t material or fraudulent in light of a recent the U.S. Supreme Court ruling in a case called Universal Health Services v. Escobar.

Mount Sinai asserted that a radiologist’s misidentification did not impact the government, because it would have paid the claim anyway since the services rendered were reasonable and necessary. Mount Sinai also revealed it had discussed the name-switching practice with government officials, and had attempted to clear up the matter by paying refunds.

Since state and federal officials had taken no further administrative action, the hospital maintained the alleged violations were not material. Mount Sinai also asked the court to dismiss the allegations of "upcoding" and double billing by arguing that the whistleblowers hadn't established specific knowledge of the billing’s falsity.

The appeals court obliged in part, dismissing claims that misidentifying radiologists on Medicaid and Medicare forms constituted fraud, and that the hospital had violated reverse False Claims Act provisions in state and federal law. But, the appeals court would not dismiss the charges that Mount Sinai had submitted false claims and false documents by using a “cheat sheet” to switch provider names and by submitting erroneous billing codes on Medicare claims.

The case concluded in March 2018, when Mount Sinai agreed to pay $4.4 million to settle the allegations against it. However, this was not the only legal trouble for Mount Sinai and its affiliates.

Mount Sinai overbills Medicare patients

In May 2014, the Office of the Inspector General of the Department of Health and Human Services revealed that Mount Sinai had overbilled for services to elderly patients who were literally starving to death. 

The OIG issued a report, finding that Mount Sinai had incorrectly billed Medicare inpatient claims related to Kwashiorkor, a form of severe protein malnutrition that primarily affects patients over age 65. The overbilling happened over the course of three years, 2010 through 2012, resulting in overpayments. Hospital officials claimed its coding staff had misinterpreted the coding guidelines.

Mount Sinai and Continuum pay $2.9 million to settle overbilling allegations

A subsequent case of overbilling settled in August 2016 for $2.95 million. The US Attorney for the Southern District of New York, working on information from whistleblowers, had brought a civil fraud case against Mount Sinai and Continuum Health Partners, Inc. for “willfully delaying repayment of over $800,000 in Medicaid overpayments.” The case was brought under the federal False Claims Act and the New York State False Claims Act.

According to Manhattan U.S. Attorney Preet Bharara, Continuum had erroneously billed 444 claims to Medicaid between 2009 and 2010, before its merger with Mount Sinai. When the company learned about the potential overpayments from Medicaid in 2011, it “had an obligation under the law to return those funds within 60 days.”  

Yet, “Continuum delayed repayment for more than two years and only fully repaid the Medicaid program in 2013.” The overpayments may have begun as innocent errors due to a software issue, but it was the willful failure to correct the situation that led to the charges.

US Dept. of Health and Human Services alleges $41.9 million in Medicare overbilling

Mount Sinai’s Medicare overbilling was an issue again in 2017. The Office of the Inspector General of the Department of Health and Human Services released a report estimating that Mount Sinai Hospital had overbilled Medicare by $41.9 million from Jan. 1, 2012, through Dec. 31, 2013. Mount Sinai said it disagreed with the OIG findings, calling its review process “deeply flawed,” and vowed to appeal. 

In 2019, the U.S. Department of Justice decided to intervene in the case, because Continuum had “knowingly concealed and knowingly and improperly avoided or decreased an obligation to pay or transmit money or property [back] to the Government.”

The role of whistleblowers in exposing Mount Sinai fraud

Whistleblowers are tremendously important in the war on fraud in Medicare and Medicaid. In the first case discussed above, two whistleblowers had initially brought their concerns to Mount Sinai management. When the company failed to correct the problem, the whistleblowers took their evidence to the government. The result was a lawsuit under the False Claims Act, which compelled a $4.4 million settlement. As a reward for their services, the whistleblowers were granted a $1.3 million reward, representing 30 percent of the government’s recovery.

It’s impossible to know for certain how much fraud costs these vital programs every year. However, the U.S. Department of Health and Human Services has estimated that Medicaid and Medicare lose about 12 percent of their budgets annually to waste, fraud, and abuse. The dollar figure is somewhere around $140 billion. The survival of these crucial government programs depends on honest citizens coming forward and reporting abuse.

Whistleblowers needed to restore integrity to healthcare

Large healthcare systems like Mount Sinai and Continuum serve millions of patients annually. If they choose to abuse Medicare and Medicaid, those programs cannot properly serve the elderly and the poor they’re designed to assist. Putting unjust enrichment before the needs of our most vulnerable citizens is unconscionable. This is why we urge any and all insiders with knowledge of fraudulent activity to come forward.

Our attorneys can professionally evaluate your information and assess the case. We can advise you on the FCA process, and, most importantly, we can protect your rights if you choose to go forward. 

It is illegal for employers to punish employees in any way for whistleblowing activity. You do not have to put your career at risk, and you can have the satisfaction of actively participating in necessary efforts to root out fraud against the government and the American people whose taxes pay for these programs.


Steve Halperin

New York trial attorney Steve T. Halperin is a well-known litigator with extensive knowledge of whistleblower laws and the New York False Claims Act. He has 28 years of experience as one of New York’s top tier attorneys. From the Manhattan offices of HalperinBikel, Steve’s whistleblower cases can run the gamut from lawsuits against healthcare. Whistleblowers: A New Yorker’s Step By Step Guide systems and providers cheating on New York Medicaid to private companies providing worthless services, or false billings by government contractors. With hundreds of winning verdicts and favorable settlements in healthcare and corporate cases, attorney Halperin’s meticulous preparation, courtroom acuity, and client-centered professionalism create remarkable outcomes.

To contact Steve: [hidden email] or 929.290.1266
For media inquiries or speaking engagements: [hidden email]