Two Long Island Providers Settle Medicaid Audits

Attorney General Spitzer today announced that two Long Island Medicaid providers have agreed to pay $854,000 to resolve investigations being conducted by the Medicaid Fraud Control Unit ("MFCU").

In the first case Dr. Simon Zysman, the Executive Director and owner of Employee Assistance Resource Services, Inc., ("EARS") a substance abuse clinic operating in Smithtown, agreed to pay $700,000 to the Medicaid program to resolve allegations that EARS had submitted a false cost report to the New York State Department of Health which caused Medicaid to overpay the clinic.

As part of the settlement, EARS and Zysman will implement a compliance program that includes the appointment of a compliance officer, training for clinical and billing personnel and the employment of a certified public accountant to audit EARS billings to the Medicaid program.

An audit by MFCU revealed that Zysman, a psychotherapist, wrongly included in the EARS cost report payments for rent and legal fees unrelated to the EARS operation and salaries paid to persons not employed by EARS. In addition to overstating EARS costs, the cost report substantially understated the number of patient visits at the EARS clinic. Based on these reported costs and patient visits, the Department of Health calculated a higher reimbursement rate for EARS services than EARS was entitled to receive.

The second case resolved allegations arising from a MFCU audit of the dental practice of Dr. Lewis Milhim, who had offices in Hempstead and Huntington, New York. Although Milhim was registered with Medicaid as an individual dental provider, the audit established that he, in fact, improperly operated a group practice and that he employed other dentists to perform services which he billed under his individual Medicaid provider number. One of those employed was a dentist, Dr. Edward Levy, who was terminated from the Medicaid program during the time he was working for Milhim.

Under the law, Medicaid will not pay for services rendered by excluded providers and, as a result, Milhim was not entitled to bill Medicaid for any services provided by Levy. Had Milhim complied with Medicaid regulations and properly registered his practice as a group practice, he would have received notification that Levy had been excluded from the Medicaid program. In addition to these billings, the audit revealed that Milhim had billed for other services which were not supported by documentation required by the Medicaid program. To settle these audit findings, Milhim agreed to pay Medicaid $154,000.

Special Assistant Attorney General Alan Buonpastore, Regional Director of the MFCU's Hauppauge office, led the investigation of both matters. He was assisted on the EARS investigation by the following MFCU auditors: Chris Simeti, John Grunenberg, Gretchen Hugh, Daniel Layer and by MFCU investigators Stephen Nicastro and William Sinacori. MFCU auditors Chris Simeti, JoAnn Satchwill and investigator Stephen Hill assisted in the Milhim investigation.

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