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UNITED STATES INTERVENES IN ACTION ALLEGING THAT NEW YORK CITY DEPARTMENT OF EDUCATION IMPROPERLY BILLED MEDICAID FOR PSYCHOLOGICAL SERVICES TO SPECIAL EDUCATION STUDENTS

Loretta E. Lynch, United States Attorney for the Eastern District of New York, today announced that the United States has intervened in the matter of Ohlmeyer ex rel United States of America v. City of New York, an action brought pursuant to the qui tam whistleblower provisions of the federal False Claims Act, 31 U.S.C. §§ 3729-33. In its complaint, the United States alleges that the City of New York Department of Education (DOE) submitted false claims to Medicaid for psychological counseling services to special education students in the New York City public schools.

As set forth in the government’s complaint, Medicaid pays DOE a flat fee of $223 for each student to whom DOE provides at least two psychological counseling sessions in a month. Medicaid pays nothing if an individual student receives fewer than two counseling sessions in a month. The complaint alleges that, between 2001 and 2004, DOE knowingly billed Medicaid for counseling services to students even though it provided fewer than two counseling sessions per month to individual students. In one instance, DOE requested reimbursement from Medicaid for psychological counseling provided to a student for 15 months during the 2001-02 and 2002-03 school years, although, according to DOE’s own service records, the student received fewer than two counseling sessions in 12 of those months. The United States seeks treble damages, penalties and costs from DOE in excess of $2 million.

“We will vigorously investigate and prosecute allegations of fraud on federal programs, especially in programs where the intended recipients of services are vulnerable children with special needs,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the United States Department of Health and Human Services, Office of the Inspector General, New York Region, for its assistance.
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