Government Joins Whistleblower Lawsuit by VS&G Client Alleging Computer Sciences Corp. & NYC Defrauded Medicaid

New York, October 28, 2014 — The federal government and New York State have joined a qui tam whistleblower lawsuit filed in 2012 by a former Computer Sciences Corporation (CSC) employee represented by Washington, D.C. law firm Vogel, Slade & Goldstein.   The federal government has joined claims that VS&G’s client brought against New York City and CSC under the federal False Claims Act.  The federal government alleges that NYC, and CSC, in its role as fiscal agent for NYC, conspired to submit millions of dollars of false claims to Medicaid in connection with a New York State program intended to benefit children with developmental delays or a medical condition likely to lead to development delays.   New York State has intervened in the claims of VS&G’s client that were brought against CSC under the state’s false claims law.  (New York State’s false claims law does not permit the state to sue municipalities.)

In a statement issued on October 27, 2014, U.S. Attorney Preet Bharara noted that the federal complaint alleges that CSC and the City, “created computer programs that systematically, and fraudulently, altered billing data in order to get paid by Medicaid as quickly as possible and as much as possible. Billing frauds like those alleged undermine the integrity of public healthcare programs like Medicaid.”

The federal complaint further alleges that, instead of seeking out correct private insurance ID numbers for “tens of thousands” of claims, CSC automatically inserted the number 999-999-999 in order to trigger quick denials from private insurance providers so that the claims could be submitted to Medicaid. The suit also alleges that CSC switched billing diagnosis codes on some claims so that Medicaid would automatically pay claims that had previously been denied.

The State of New York’s complaint alleges that CSC submitted over a million, individual false claims to Medicaid, and that CSC is liable for penalties of between $6,000 and $12,000 for each such false claim. (State of New York’s Complaint in Intervention against Computer Sciences Corporation, Paragraphs 6 and 77.)    The State’s complaint further alleges that CSC’s unlawful practice of billing Medicaid before third party insurers had adjudicated the claims led to credit balances owed Medicaid which were not returned until 2013 – i.e., the year after VS&G’s client filed his lawsuit.

In a statement to the New York Times, which covered the lawsuit in a front page story, whistleblower attorney and VS&G partner Shelley R. Slade said that the firm’s client “in filing his suit, took on significant professional and personal risk, and I applaud his courage for standing up to do what he believed was the right thing.”