Dr. Gil Lederman settlement agreement

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SLR.:RKH:LDM F# 2004VOI161

VNITBD STATES DISTRICT COURT EASTERN DISIRICT OF NEW YORK ························••••••••••••X

VNITBD STAlES OF AMERICA ex reL ELIZABETII M. RYAN,

Plaintiff,

-against-

GILBERT LEDERMAN and GILBERT LEDERMAN, M.D.,P.C.,

Defendants. ····································X

I. PARTIES

FILED IN CLERK'S OFFICE

US DISTRICT COURT E.O.N.Y.

* NOV 2 ~ 201lt * BROOKLYN OFFICE

STIPULATION AND ORDER OF SETTLEMENT

Civil Action No. 04-2483

(Gleeson, J.) (Pollak, M.J.)

This Settlement Agreement ("Agreement'') is entered into among the

United States of America, acting through the United Sl!ltes Department of Justice, and. on

behalf of the Office of Inspector General ("OIG-HHS") of the Dcp11t1ment of Health and

Human Services ("HHS") (collectively the ''United States"), Elizabeth M Ryan ("Ryan•

or the "Relator''), and Dr. Gilbert Lederman and Gilbert Lederman M.D., PC (together

"Lederman") (hereinafter referred to collectively as the "Parties"), through their

authorized representatives.

II. PRMMQLE

A. The United States has alleged that, at ail relevant times, Lederman

was a health care provider who provided cancer treatment services, including stereotactic

body radiosurgery ("BRS''), to, among others, Medicare beneficiaries.

Case 1:04-cv-02483-JG-CLP Document 208 Filed 11/24/14 Page 1 of 19 PageID #: 2133

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B. Relator Is an individual resident of the State of Florida. On June

16, 2004, Relator commenced an action by filing a Complaint (the "Qui Tam

Complaint") pursuant to the qui tam provisions of the False Claims Act, 31 U.S. C.

§§ 3730 (b)-(b), in the United States District Court for the Eastern District ofNcw York,

captioned United Stales ex rei. Ryan v. Staten Island University Hospital, et al.,

No. CV-04-2483 (E.D.N.Y.) (the "Civil Action'1·

C. The United States filed a Notice of Partial Intervention in the Civil

Action on February 19,2008. On Jul:r 31,2008, the United States filed a complaint (the

"Complaint-in-Intervention'') in which it aasertcd claims under the False Claims Act and

common law claims arising out of Lederman's billing of BRS to Medicare.

D. The United States contends that Lederman submitted or caused to

be submitted claims for payment to the Medicare Program (Medicare), Title XVIII of the

Social Security Act, 42 U.S.C. §§ l395-l39Skkk-1.

E. Tho Complaint-in-Intervention alleged that Lederman engaged in

the following conduct: during the period 1996 through December 2003, Lederman

knowingly presented or caused to be presented false claims to Medicare seeking

reimbursement for BRS that Lederman provided to approximately 300 patients

(hereinafter referred to aa the "Covered Conduct'').

F, This Agreement is neither an admission of liability by Lederman

nor a conceasion by the United States that its claims are not well founded.

G. Relator claims entitlement under 31 U.S.C. § 3730(d)to a share of

· the proceeds of this Settlement Agreement and to Relator's reasonable expenses,

attorneys' fees and costs.

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H. To avoid the delay, uncertainty, inconvenience, and expense of

protracted litigation ofthe above claims, Lederman, tho Relator, and the United States

have reached a full and final settlemont of the claims in the Civil Action pursuant to the .

Terms and Conditions herein.

Ill. TERMS AND CONPIDQNS

1. Lederman shall pay to the United Ststes two million one hundred

seventy f'tve thousand dollars ($2,17S,OOO) (tho "Settlement Amount") no later than ten

(I 0) daya after the Effective Date of this Agreement, as defined in paragraph 28, below.

Payment of the Settlement Amount shall be made by electronic funds transfer pursuant to

written instructions to be provided by the Office of the United States Attorney for the

Eastern District ofNew Yorlc.

2. Conditioned upon the United States receiving the Settlement

Amount from Lederman and as scon as feasible after receipt, the United States shall pay

three hundred twenty six thousand two hundred fifty dollars ($326,250) to Relator. Such

payment shall be mode by electronic funds transfer to the client trnst account of

Liffiander & Reich LLP for the benefit of Elizabeth M. Ryan.

3. Lederman shall pay Relator's counsel expenses, attorney's fees

and costs, pursuant to 31 U.S.C. § 3730(d)(l) of the False Claims Act ("Relator's

Attorney's Fees''}, in the amount of one hundred seventy five thousand dollars

($175,000). Full payment of the Relator's Attorney's Fees is due within ten (10) days

after the Effective Date of this Agreement, as defined in paragraph 28, below. Such

payment ohall be made by electronic funds transfer pursuant to written instructions to be

provided by Relator's counsel.

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4. Subject to the exceptions In Paragraph 6 (concerning excluded

claims) below, and conditioned upon Ledennan's full payment of the Settlement

Amount, and subject to Paragraph 15 below (concerning bankruptcy proceedings

commenced within 91 days of the Effective Date of this Agraement or any payment made

under this Agreement), 1he United States releases Lederman from any civil or

administrative monetary claim the United States has for the Covered Conduct under the

False Claims Act, 31 U.S.C. §§ 3729-3733; the Civil Monetary Penslties Law, 42 U.S.C.

§ 1320a-7a; the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812; or the

common law theories of payment by mistake, unjust enriclunent, and fraud.

5. Subject to the exceptions in Paragraph 6 below, conditioned upon

Lederman's full payment of the Settlement Amount and Relator's Attorney's Fees, and

subject to Paragraph 15 below (concerning banl<l'Uptcy proceedings commenced within

91 days of the Effective Date of this Agreement or any payment made under this

Agreement), Relator, for herself and for her heirs, successors, attorneys, agents, and

assigns, releases Lederman from any civil monetary claim Relator has on behalf of the

United States for the Covered Conduct under the False Claims Act, 31 U.S.C. §§ 3729-

3733.

6. Notwithstanding the releases given in paragraphs 4 and 5 of this

Agreement, or any other term of this Agreement, the following claims of the United

States are specifically reserved and are not released:

a. Any liability arising under Title 26, U.S. Code (Internal

Revenue Code);

b. Any criminal liability;

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c. Except as. explicitly stated in tbis Agreement, any

administrative liability, including mandatory or permissive exclusion from Federal health

care programs;

d. Any liability to the United States (or its agencies) for any

conduct other than the Covered Cooduct;

c:. Any liablllty basoo upon obligations created by this

Agreement;

f. Any liability for c:xpress or implied warranty claims or

othc:r claims for defective or deficient products or sc:rvices, including quality of goods

and services;

g. Any liability for failure to dc:liver goods or services due;

h. AJJ.y liability for personal injury or property damage or for

other consequential damages arising from the Covc:roo Conduct; or

i. AJJ.y liability of individuals except Lederman as set forth

herein.

7, Relator and her heirs, successors, attorneys, agents, and assigns

shall not object to this Agreement but agree and confirm that this Agreement is fair,

adequate, and reasonable under all the circumstances, pursuant to 31 U.S.C.

§ 3730(c)(2)(B). Conditioned upon Relator's receipt of the payment described in

Paragraph 2, Relator and her heirs, successors, attorneys, agents, and assigns fully and

finally release, waive, and forever discharge the United States, its agencies, officers,

agents, employees, and servants, from any claims arising from the filing of the Clvil

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Action or under 31 U.S.C. § 3730, and from any claims to a share oftheproceedsofthis

Agreement and/or the Civil Action.

8. Relator, for herself, and for her heirs, successors, ~ttorneys, agents,

and assigns, releases Ledennan, and its officers, agents, and employees, :from any

liability to Relator arising :from the filing of the Civil Action, or under 31 U.S.C. §

3730(d) fur exponses or attorney's fees and costs.

9. Lederman waives and shaH not assert any defenses Lederman may

have to any criminal prosecution or administrative action relating to the Covered Conduct

that may be baaed in whole or in part on a contention that, under the Double Jeopardy

Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines Clause

in the Eighth Amendment of the Constitution, this Agreement bers a remedy sought in

such criminal prosecution or admlnistrative action. Nothing in this peragraph or any

other provision of this Agreement constitutes an agreement by the United States

concerning the characterization of the Settlement Amount or any of the payments

required under paragrsphs 1 through 3, herein, for purposes of the Internal Revenue laws,

Title 26 of the United States Code.

10. Lederman fulJy and finally releases the United States, its agencies,

officers, agents, employees, and servants, from any claims (including attorney's fees,

costs, and expenses of every kind and however denominated) that Lederman has asaerted,

could have asserted, or may assert in the future against the United States, Its agencies,

officers, agents, etttployecs, and servants, related to the Covered Conduct and the United

States' investigation and prosecution thereof.

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11. Ledcnnan fully and finally noleases Relator and her heirs,

attorneys, agents and assigns from any claims (including attorney's fees, costs, and

expenses of every kind and however denominated) that Lederman has asserted, could

have asserted, or may assert in the future against Relator and her heirs, attorneys, agents

and assigns, related to the Covered Conduct and the Relator's investigation and

prosecution thereof.

12. The Settlement Amount shall not be decreased as a result of the

denial of claims for payment now being withheld from payment by any Medicano

contractor (e.g., Medicare Administrative Contractor, fiscal intermediary, carrier), or any

state payer, related to the Covered Conduct; and Lederman agrees not to resubmit to any

Medicare contractor or any state payer any previously denied claims related to the

Covered Conduct, and agrees not to appeal any such denials of claims.

13. Lederman agrees to the following:

a. Unallowable Costs Defmed: All costs (as defined in the

Federal Acquisition Regulation, 48 C.F.R. § 31.205-47; and in Titles XVIII and XIX of

the Social Security Act, 42 U.S.C. §§ l39S-1395kkk-1 and 1396-1396w-S; and the

regulations and official program directives promulgated thereunder) incurred by or on

behalf of Lederman; its present or former offioers, directors, employees, shareholders,

and agents in connection with:

(1) the matters covered by this Agreement;

(2) the United Ststes' audit(s) and civil investigation(•)

of the matters covered by this Agreement;

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(3) Lederman's investigation, defeilse, and comctlve

actions undertaken in response to the United States' audit(s) and civil investigation( a) in

connection with the matters covered by this Agreement (including attorney's fees);

(4) the negotiation and performance of this Agreement;

and

(5) the psyment Lederman. makes to the United States

pnrsuant to this Agreement and any psyments that Lederman may make to Relator,

including costs and attorneys fees.

are unallowable costs for government contracting purposes and under the Medicare

Program, Medicaid Program, TRICARE Program, and Federal Employees Health

Benefits Program (FEHBP) (hereinafter referred to as "Unallowable Costs").

b. Future Treatment of Unallowable Costs: Unallowable

Costs shall be separately determined and accounted for by Lederman, and Lederman shall

not charge such Unallowable Costs directly or indirectly to any contracts with the United

States or any State Medicaid program, or seek psyment for such Unallowable Costs

through any cost report, cost statement, informstion statement, or payment request

submitted by Lederman or any of its subsidiaries or affiliates to the Medicare, Medicaid,

or FEHBP Programs.

c. Treatment of Unallowable Costs Previously Submitted for

Pavment: Lederman further agrees that within 90 days of the Effective Date of this

Agreement it shall identify to applicable Medicare fiscal intermediaries, carriers, and/or

contractors, and Medicaid and FEHBP fiscal agents, any Unallowable Costs (as defmed

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in this Paragraph) included in payments previously sought from the United States, or any

State Medicaid program, including, but not limited to, payments sought in any cost

reports, cost statements, information reports, or payment requests already submitted by

Lederman or any of its subsidiaries or affiliates, and shall request, and agree, that such

cost reports, cost statements, information reports, or payment requests, even if already

settled, be adjuated to account for the effect of the inclusion of tho Unallowable Costs.

Lederman agrees that the United States, at a minimum, shall be eJ!titled to recoup from

Lederman any overpayment pins applicable interest and penalties as a result of the

inclusion of such Unallowable Costs on previously-submitted cost reports, information

reports, cost statements, or requests for payment

Any payments due after the adjustments have been made shall be paid to

the United States pursuant to the direction of the Department of Justice and/or the

affected agencies. The United States reserves its rights to disagree with any calculations

submitted by Lederman or any of its subsidiaries or affiliates on the effect of Inclusion of

Unallowable Costs (as defined In this Paragraph) on Lederman or any of its subsidiaries

or affiliates' cost reports, cost statements, or information reports.

d. Nothing in this Agreement shall constitute a waiver of the

rights of the United States to audit; examine, or re-examine Lederman's books and

records to determine that no Unallowable Costs have been claimed in accordsnce with

the provisions of this Paragraph.

14. Lederman warrants that it has reviewed its fmancial situation and

that it is currently solvent within the meaning of 11 U.S.C. §§ 547(b)(3) and

548(a)(l)(B)(ii)(I), and shall remain solvent following payment to the United States of

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the Settlement Amount. Further, the Parties warrant that, in evaluating whether to

execute this Agreement, they (a) have intended thst the mutual promises, covenants, and

obligatlons set forth herein constitute a contemporaneous exchange for new value given

to Lederman, within the meaning of 11 U .S.C. § 54 7(c )(!), and (b) conclude that these

mutual promises, covenants, and obligations do, in fact, constitute such a

oontemporanemis exchange. Further, the Parties warrant thet the mutual promises,

covenants, and obligations set forth herein are intended to and do, in fact, represent a

reasonably equivalent exchange of value which is not intended to hinder, delay, or

defraud any entity to which Lederman was or became indebted to on or after the_ date of

this transfer, within the meaning of 11 U.S.C. § 548(a)(l).

IS. If within 91 days of the Effective Date of this Agreement or of any

payment made under this Agreement, Lederman commences, or a third party commences,

any case, proceeding, or other action under any law relating to banlauptcy, insolvency,

reorganization, or relief of debtors, (a) seeking to have any order fur l'eliefofLederman's

debts, or seeking to adjudicate Lederman as bankrupt or insolvent; or (b) seeking

appointment of a receiver, trustee, custodian, or other similar official for Lederman or fur

all or any substantial part ofLederman's assets, Lederman agrees as follows:

a. Lederman's obligations under this Agreement may not be

avoided pursuant to 11 U.S.C. § 547, aod Lederman shall not argue or otherwise take the

position in any such case, proceeding, or action that: (i) Lederman's obligations under

this Agreement may be avoided under II U.S.C. § 54 7; (ii) Lederman was insolvent at

the thne this Agreement was entered Into, or became insolvent as a result of the payment

made to the United States; or (iii) the mutual promises, covenants, and obligations set

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forth in this Agreement do not constitute a contemporaneous exchsnge for new value

given to Lederman.

b. IfLederman's obligations under this Agreement are

avoided for any reason, including, but not limited to, through the exercise of a trustee's

avoidance powers under the Bankruptcy Code, the United Stetes, at its sole option, may

rescind the releases in this Agreement and bring any civil and/or administrative claim,

action, or proceeding against Ledennan for the claims that would otherwise be covered

by the releases provided in Paragraphs 4 and S, herein. Lederman agrees that (i) any such

claims, ections, or proceedings brought by the United States (including any proceedings

to exclude Lederman from participation in Medicare, Medicaid, or other Federal health

care programs) are not subject to an "aotomatic stay" pursuant to 11 U.S.C. § 362(a) as a

result of the action, case, or proceedings described in the first clause of this Paragraph,

and that Ledennan shall not argue or otherwise contend that the United States' claima,

actions, or proceedings are subject to an automatic stay; (ii) Lederman shall not plead,

argue, or otherwise raise any defenses under the theories of statute of limitations, laches,

estoppel, or similar theories, to any such civil or administrative claims, actions, or

proceeding that are brought by the United Stetes within sixty (60) calendar days of

written notification to Lederman that the releases have been rescinded pursuant to this

Paragraph, except to the extent such defenses were available on the Effective Date of the

Agreement; and (iii) the United States has a valid claim against Lederman in an amount

no less the $2,175,000, and the United States may pursue its claim in the case, action, or

proceeding referenced in the first clause of this Paragraph, as well as in any other case,

action, or proceeding.

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c. Lederman acknowledges that its agreements in this

Paragraph are provided in exchange for valuable consideration provided in this

Agreement.

16. This Agreement is intended to be for the benefit of the Parties

only. The Parties do not release any claims against any otber person or entity, except to

tbe extent provided for in Paragraph 17 (waiver for beneficiaries paragraph), below.

17. Lederman agrees that it waives and shall not seek payment for any

oftbe health care billings covered by this Agreement from any health care beneficiaries

or their parents, sponsors, legally responsible individuals, or third party payors based

upon the claims defined as Covered Conduct.

18. Witbinninety one (91) days of the receipt of the payment

described in Paragraph 1, herein, tbc Parties shall promptly sign and ffie in the Civil

Action a Joint Stipulation of Dismissal oftbe Civil Action pursuantto Rule 4l(a)(l).

19. Except as provided in paragraph3, herein, eaoh Party shall bear its

own legal and other costs incurred in connection witb this mstter, including the

preparation and performance of tbis Agreement.

20. Each party and sisnatory to this Agreement represents tbat It freely

and voluntarily enters In to this Agreement witbout any degree of duress or compulsion.

21. This Agreement is governed by the laws of the United States. The

exclusive jurisdiction and venue for any dispute relating to tbis Agreement is tbc United

States District Court for the Eastern District of New York. For purposes of construing

tbis Agreement, this Agreement shall be deemed to have been drafted by all Parties to

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this Agreement and shall not, therefore, be construed against any Party for that reason in

any subsequent dispute.

22. This Agreement ·constitutes the complete agreement between the

Parties. This Agreement may not be amended eJWept by written consent of the Parties.

23. The undersigned counsel represent and warrant that they are fully

authorized to oxeoutc this Agreement on behalf of the persons and entities indicated

below.

24. This Agreement may be executed in counterparts, each of which

constitutes an original and all of which constitute one and the same Agreement

25. This Agreement is binding on Lederman's successors,1ransfcrecs,

heirs, and assigns.

26. This Agreement is binding on fuolator's successors, transferees,

heirs, and assigns.

27. All parties consent to the United States' disclosure of this

Agreement, and information about this Agreement, to the public.

28. This Agreement is effective on the date that it Is "so ordered" by

the Court ("Effective Date of this Agreement").

29. Facsimiles, electronic mail in portable document format(" .PDF")

form, or any other electronic means intended to preserve the original graphic or pictorial

appearance of signatures shall constitute acceptable, binding signatures for purposes of

this Agreement.

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THE UNITED STATES OF 4MERICA

DATED: 1\Jov' 1; 1~1Lt

BY:

DATED: __ _

BY:

LORE'ITA E. LYNCH United States Attorney Eastern Dis1rict ofNew York 271 Cadman PlazaEast Brooklyn, NY 1120 I

~J-&:( LAURA D. MANTELL RICHARD K. HAYES Assistant U.S. Attorney

ROBERTK. DECONTI Assistantlnspector General for Legal Affairs Office of Counsel to the Inspector General Office of Inspector General United States Department of Health and Human Services

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DATED:----

DATED:W

THE UNITED STATFS OF AMERICA

BY:

WRETIAE. LYNCH United States Attorney Eastern District ofN ew York 271 Cadman Plaza East Brooklyn, NY 11201

LAURA D. MANTELL RICHARD K.. HAYES Assistant U.S. Attorney

'fJtepf 1:;, J}_(~ ROBERT K.. DECONTI Assistant Inspector General for Legal Affairs Office of CoWJSel to the

Inspector General Office of Inspector General United States Department of

Health and Human Services

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DR. GILBERT LEDERMAN AND GILBERT LEDERMAN MD. PC

DATIID: ~~f0lL/ DATED: ( l,/r;/td DATIID:~:

BY:

BY:

BY:

[·. bM!'t L ~rAw!\ M · GILBi'id LEDERMAN MD, PC

ELIZABETH M. RYAN- RELATOR

DATED:,~--

DATED:.~-~-

BY:

ELIZABETHM.RYAN

LIFFLANDER & REICH LLP 425 Madison Avenue, Suite 505 NewYork,NY 10017

RICHARD I. REtCH, ESQ Counsel for Relator

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DR. GILBERT LEDERMAN AND GILBERT LEDERMAN MD, PC

DATED: __ _

DATED: ___ _

DATED: __ _

DATED:#~

DATED:#

BY:

BY:

BY:

GILBERT LEDERMAN

GILBERT LEDERMAN MD, PC

TRACY & STILL WELL AND PARTNERS, PC 1688 Victory Boulevard Staten Island, New York 10314

JOHN J. TRACY, ESQ Counsel for Defendants

ELIZABETH M. RYAN- RELATQR

BY:

~~/!~ LIFFLANDER & REICH LLP 425 Madison Avenue, Suite 505

~7/Jd RICHARD I. REICH, BSQ \_ Counsel for Relator

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SO ORDEREJL On this ~·day of November, 2014

HONO United

GLEESON Judge

16

s/John Gleeson


By ECF and Hand Delivery

Honorable John Gleeson United States District Judge United States Courthouse 225 Cadman Plaza East Brooklyn, New York 11201

U.S. Department of Justice

United States Attorney Eastern District of New York

271 Cadman Plaza East-1" Floor Brooklyn, NY 11201

November 17, 2014

Re: United States ex rei. Elizabeth M. Ryan v. Gilbert Lederman, M.D., et ano. Civil Action No. CV-04-2483 (Gleeson, J.) (Pollak. M.J.)

Dear Judge Gleeson:

Enclosed for Your Honor's consideration is a Stipulation and Proposed Order of Settlement, executed by all parties. The enclosed resolves the claims of the United States and Relator Elizabeth M. Ryan against defendants Gilbert Lederman and Gilbert Lederman, M.D., P.C.

We respectfully request that Your Honor "so order" the enclosed.

Encl.

cc: John Tracy (by ECF) Richard Reich (by ECF)

. ·, .•

Respectfully submitted,

LORETTA E. LYNCH United States Attorney ·

By: ~~~L---------Laura D. Mantell Assistant U.S. Attorney (718) 254-6253


Documents

Dr. Gil Lederman settlement agreement