Newark Beth Israel to Pay $250K in Healthcare Fraud Case

Settlement stems from allegations of inadequate patient information

Newark Beth Israel Medical Center will pay $250,000 to settle allegations concerning its heart transplant program, which is part of a larger nationwide investigation into healthcare fraud by the Department of Justice.

Allegations Against the Hospital

The U.S. Attorney’s Office contends that, between January 1, 2018, and December 31, 2019, physicians at Newark Beth Israel’s Center for Advanced Heart Failure and Transplant did not give patients and their families sufficient information before obtaining consent for treatments.

Authorities further allege that this lack of information led to medically unnecessary treatments being billed to Medicare.

However, Newark Beth Israel refutes these allegations, asserting that it always provided complete information before seeking patient consent.

According to a hospital spokesperson, “This civil settlement is not in any way an admission of wrongdoing or liability on the part of Newark Beth Israel.”

The spokesperson also stated that “this matter is completely unrelated to any of the actions announced by the government in its omnibus press release.”

Nationwide Health Care Fraud Takedown

The settlement with Newark Beth Israel was revealed alongside a broader “national health care fraud takedown,” which includes criminal charges against 324 defendants—96 of whom are doctors, nurse practitioners, pharmacists, and other licensed medical professionals, according to the U.S. Attorney’s Office.

These charges involve fraudulent reimbursements for unnecessary drugs, devices, and tests, as well as pharmacies seeking payment for drugs never sold, and healthcare providers accepting kickbacks for phony prescriptions.

Federal authorities estimate these healthcare schemes resulted in losses exceeding $14.6 billion.

The nationwide investigation led to 25 civil settlement agreements, including Newark Beth Israel’s.

Other Settlements and Criminal Cases in New Jersey

In New Jersey, five other settlement agreements were reached:

• Excel Pharmacy Inc. in Jersey City will pay $3 million to resolve allegations of submitting false claims to Medicare and New Jersey Medicaid for drugs never sold between January 2, 2015, and January 25, 2022.
• QuickRx LLC., affiliated with Community Pharmacy, will pay $962,821 for similar allegations from January 7, 2015, through January 24, 2022.
• Raghu Ram Inc., doing business as Camden Discount Pharmacy, will pay $310,000 to resolve claims of billing Medicare and New Jersey Medicaid for drugs never sold between January 2, 2015, and January 24, 2022.
• Rachit Drug Inc., a retail pharmacy in **Newark**, will pay $250,000 to settle claims of seeking reimbursement for drugs never sold from January 2, 2015, through January 25, 2022.
• Premier Dental Holdings, operating as Sonrava Health, will pay $540,000 to resolve allegations of submitting reimbursements for services performed by improperly credentialed providers from January 1, 2021, through July 31, 2023.

Additionally, three criminal cases were announced in the District of New Jersey:

• Alan Vaughan, 56, of the United Kingdom, was charged with conspiracy to violate the federal anti-kickback statute in connection with an $80 million scheme involving referrals for medical equipment and cancer genetic tests.
• Taejin Kim, 43, a licensed physical therapist from River Vale, was charged with defrauding the Amtrak health care program of approximately $2.25 million by submitting false claims.
• Nestor E. Jaime, owner of Jaime Pharmacy in Paterson, was charged with health care fraud related to receiving $2.5 million from Medicare for prescription medications the pharmacy never sold.

The DOJ has continued to crack down on healthcare fraud, as evidenced by a recent case in which a durable medical equipment company owner was sentenced to prison for a $4.7 million fraud scheme (DOJ, 2024).