NYU to pay $15.5 million after government probe
May 1, 1997 3 minutes read
NYU to pay $15.5 million after government probe
A three-year investigation into possible fraudulent charges for research has resulted in a $15.5 million settlement by New York University Medical Center, the largest amount ever paid in a case involving research overhead at a university.
Federal prosecutors say that for years, the medical center intentionally overcharged the federal government for research expenses. Prosecutors allege the facility billed the government for waste disposal that already had been charged to other sources, and charged for non-reimbursable expenses such as catering for the medical school commencement dinner. Those expenses were called research overhead.
The federal government’s investigation began in 1993, when a former accountant at the university filed a lawsuit under the Federal False Claims Act. Andrew Schaffer, JD, vice president and legal counsel for New York University, released a statement denying that any of the overbilling was intentional. Some accounting errors were made from 1982 to 1993, he said, but university officials did not purposely charge the federal government for non-reimbursable expenses.
The settlement was reached only because the university did not want to risk a trial, he said. Prior to the New York University settlement, the largest settlement for overcharging for research overhead involved Harvard University, which agreed to pay $4.6 million in 1983. The New York University whistleblower will get $1.6 million of the settlement. t
Pharmacy sells computer containing patient files
A computer sale in Arizona illustrates the threats to patient confidentiality posed by health care providers who are not sufficiently diligent about cleaning patient files out of computers. A pharmacy sold a computer, and the purchaser found that it had 2,000 patient records still in the system, easily accessible and detailed.
The patient records contained complete names, addresses, Social Security numbers, and histories of all the drugs prescribed for them. The computer had been used in a Smitty’s Supermarket pharmacy in Tempe before being sold to a computer dealer and then to a self-employed computer technician. When C.J. Prime of Parhump, NV, turned on her newly purchased computer, the pharmacy’s patient record system popped up on the screen. She didn’t even have look for the information.
Smitty’s Supermarkets since have merged with Smith’s Food and Drug Centers in Salt Lake City. Smith’s has released a statement acknowledging that the patient records were released improperly and pledging a full investigation into how it happened.
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