US Recovers $400,000 in Settlement of Civil Health Care Fraud Against Floating Hospital –
PREET BHARARA, the United States Attorney for the
Southern District of New York, announced today that the United
States has filed, and simultaneously settled, a civil health care
fraud lawsuit against THE FLOATING HOSPITAL for allegedly
submitting false claims to Medicaid for reimbursement in
connection with physical, occupational, and speech therapy
services. The settlement, approved yesterday in federal court in
Manhattan by United States District Judge LEONARD B. SAND
requires The Floating Hospital to pay $400,000 in civil damages
under the False Claims Act.

According to the documents filed in Manhattan federal

The Floating Hospital is a New York non-profit
organization, licensed under Article 28 of the New York State
Public Health Law as a diagnostic and treatment center, that
provides primary, dental, and mental healthcare to indigent New
Yorkers. Under Medicaid rules, Article 28 facilities are
permitted, in certain circumstances, to open part-time clinics.
Medicaid rules further provide that such part-time clinics may
not provide services unavailable at the Article 28 facility’s
primary site.

From 1997 to 2004, The Floating Hospital opened as many
as 100 part-time clinics through which it provided physical,
occupation, and speech therapy services, which were not provided
at TFH’s primary site. The Floating Hospital violated the False
Claims Act by submitting Medicaid claims for those therapy
services even though none of them were properly reimbursable
under Medicaid.

Until September 2001, the Floating Hospital’s primary
clinic was located on a ship anchored in the East River near Wall
Street. Today, the Floating Hospital’s main clinic and
administrative offices are located in Long Island City, New York.
The case is being handled by the Office’s newly-formed
Civil Frauds Unit. Assistant United States Attorney REBECCA C.
MARTIN is in charge of the case.
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