Watertown whistleblower gets $10 million in Medicaid fraud suit against New York
by Mike McAndrew / The Post-Standard
Tuesday July 21, 2009, 10:45 PM
Syracuse -- A former Watertown woman will pocket $10 million in a record-breaking settlement of a Medicaid fraud whistleblower suit against the state and New York City, the Justice Department said today.
Hedy M. Cirrincione, a speech therapist who worked in Watertown in the 1990s, triggered a federal investigation into claims that Jefferson County had improperly collected Medicaid reimbursement for services she provided to poor children in several school districts, the Justice Department said.
Cirrincione filed whistleblower suits in U.S. District Court in 1998 and 1999 against Jefferson County and the state Department of Education.
The suits were sealed for a decade, becoming public Tuesday only after Magistrate David Peebles approved a $540 million settlement that requires New York State to pay $440 million to the United States and New York City to pay $100 million.
The United States agreed to turn over $10 million to Cirrincione and $240 million to her lawyers, Menz Bonner & Komar LLP of New York City.
The settlement sets a record for a recovery for the Medicaid Program by the Justice Department. It is the seventh largest whistleblower settlement, overall, according to Cirrincione's lawyers.
New York did not admit to any wrongdoing in settling the case.
Cirrincione, 54, could not be reached Tuesday for comment. Menz Bonner attorney David Koenigsburg would not identify her or provide information about his client because he said she wanted to keep her privacy. Cirrincione purchased property in North Carolina in 2001 and sold her property in Watertown in 2008. Koenigsburg would not say where she resides.
His client took on New York because "it was the right thing to do," Koenigsburg said.
Cirrincione's whistleblower suit prompted the U.S. Health and Human Services Department to audit a decade worth of Medicaid claims submitted by school districts and counties to New York State for speech therapy, occupational therapy and transportation provided to students. New York reimbursed the localities and then obtained partial reimbursement from the federal government. The audit recommended Medicaid disallow $1.07 billion in claims for reimbursement.
"While it is unfortunate that state and city funds have to be repaid to the federal government, we believe that this settlement requires payment of approximately $1 billion less than we could potentially have had to pay if the matter had gone to litigation," Gov. David Paterson said.
The settlement with the state and New York City did not resolve claims in a separate suit Cirrincione filed against Jefferson County and Larry Tingley, its retired director of community services, in state Supreme Court.
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