Attorney General Cuomo Announces Multi-million Dollar Settlement With Nyc Dermatologist For Defrauding Medicaid

NEW YORK, NY (June 10, 2010) - Attorney General Andrew M. Cuomo and Preet Bharara, the United States Attorney for the Southern District of New York, today announced a $2.75 million settlement with Lawrence D. Jaeger, D.O., and Community Medical and Dermatology Center and Advanced Dermatology of New York, resolving a whistleblower lawsuit that alleged the doctor and his practice defrauded the Medicaid Program.

According to the complaint, in an effort to get a far higher reimbursement rate from Medicaid, Community Medical and Dermatology Center (CMDC) sought and received certification by the state to become a Diagnostic and Treatment Center. To obtain proper certification, Dr. Jaeger, on behalf of CMDC agreed in writing to expand the services offered at the medical practice and agreed to devote more than half of the practice to primary medical care. In reality, CMDC provided very little primary medical care, instead continuing to provide dermatological care most of the time, a direct violation of the terms of its certification.

As a result of his fraudulently obtained certification as a Diagnostic and Treatment Center, Dr. Jaeger received $153 per patient visit, more than five times the average $30 that Medicaid reimburses for dermatological services.

Under the terms of the settlement, Jaeger has agreed to pay $2.75 million; $2,674,000 under state and federal Medicaid claims, and $76,000 under federal Medicare claims.

“If you promise to deliver services to the neediest New Yorkers and then fleece taxpayers through lies and deceit, there will be very real consequences,” said Attorney General Cuomo. “This settlement underscores that abuse of the Medicaid program will not be tolerated.”

“Healthcare fraud drains the system of billions of dollars of hard-earned taxpayer money," said SDNY U.S. Attorney Preet Bharara. "Doctors are supposed to treat patients, not defraud the public. The Southern District of New York will continue to work with our state and federal law enforcement partners to aggressively enforce the laws prohibiting healthcare fraud.”

The settlement with Attorney General Cuomo's Office is the result of a lawsuit filed under the whistleblower provision of the New York State False Claims Act, which allows private citizens to file lawsuits alleging fraud on behalf of governmental entities, including New York and its local governments.

Attorney General Cuomo thanked the U.S. Attorney’s Office in the Southern District of New York and the New York State Office of the Medicaid Inspector General for their assistance.

The case was handled by Special Assistant Attorney General Jacob Bergman for the Medicaid Fraud Control Unit in the New York State Office of the Attorney General under the supervision of Special Assistant Attorney General Kathy Marks.

New Yorkers are urged to report cases of suspected fraud to the Attorney General's toll-free Medicaid Fraud Hotline, at 1-866-NYS-FIGHT (697-3444).