New York-Presbyterian Hudson Valley Hospital: The Payments Outlasted the Contracts

New York-Presbyterian Hudson Valley Hospital agreed to a $6.8 million settlement over alleged hospital kickbacks paid through oncology service agreements. The Cortlandt Manor, New York, hospital admitted paying for work that went undone, fell short of the contracts or lacked supporting time records. The agreements expired. The fees kept coming, while the practice sent patients whose care brought the hospital Medicare and Medicaid revenue.

The U.S. Attorney’s Office for the Southern District of New York announced the settlement on December 22, 2025. The payment included $6,469,410 for the United States and $367,354 for New York State. That state payment was part of the $616,676 Medicaid component, which also included federal funds. A former chief financial officer brought the whistleblower case, and the government joined it.

What the Hospital Paid the Oncology Practice to Do

The hospital bought medical-director services from a Westchester County oncology practice for proposed melanoma and breast cancer centers, plus management of an intraoperative radiation therapy service, known as IORT. The New York settlement order spells out the work behind each fee. These were promises to develop and run services, with specified hours and records to account for the work.

The hospital was then called Hudson Valley Hospital Center. It wanted to expand its oncology department, including breast surgery, and entered the directorship agreements in July 2011. Each directorship carried an annual fee of $185,000 and required at least 50 hours of work per month, even though the melanoma center never took shape as planned. Both required monthly time reports before payment.

The melanoma director’s central task was to develop and operate the proposed center and establish measures of its quality. The breast-center director had corresponding duties for that center.

The IORT agreement followed in September 2012. IORT delivers radiation during surgery. The practice was to develop, manage, market and integrate that service into the hospital’s Department of Radiation Oncology. Its annual fee was $125,000 for at least 45 hours of management work per month, with time records available at the hospital’s request. The hospital later admitted that the practice fell short of the required management work.

The hospital had a way to check each payment against the work: monthly reports for the directors and a management log for IORT.

What Hudson Valley Admitted About the Work

Hudson Valley admitted that it paid the practice more than $4 million between 2011 and 2019 for work that was unperformed, fell short of the agreements or lacked time records.

The proposed melanoma center never took shape as the agreement envisioned. The hospital admitted that the physician therefore did not carry out the director’s primary duties. By at least 2012, the physician was not supplying the required monthly hours toward developing or establishing the center. The hospital could identify no time records for the physician or a substitute under that agreement.

The breast-center admission is about the missing record of work. The hospital could identify no time records showing the director’s or a substitute’s services during the covered period, even though monthly reports were a condition of payment. The practice continued receiving its fee.

For IORT, the hospital could find no time records and could not confirm whether the practice ever supplied the required monthly hours.

Each agreement expired in 2016. The hospital executed no written extensions. The government’s complaint puts the payment problem plainly:

The government alleged that these payments bought referrals. The hospital kept paying a practice to direct a melanoma center that never took shape, while public health care programs paid for the referred patients’ care. The hospital’s admissions supply the concrete failures underneath that allegation: missing work, missing reports and continued fees after the written agreements ended.

What Changed After NewYork-Presbyterian Took Control

NewYork-Presbyterian began acquiring Hudson Valley in 2015, took control and began integrating its clinical services and operations. The oncology payments continued through that transition. The hospital’s admission, reproduced in the Justice Department announcement, connects awareness of incomplete work to the decision to keep paying:

That admission connects what the hospital knew or should have known to its decision to keep paying. The acquisition brought the agreements into a new healthcare system. It did not interrupt the fees.

Why the Referrals Mattered to the Hospital’s Revenue

The oncology practice’s referrals brought the hospital millions in Medicare and Medicaid reimbursements, according to the government’s complaint. Hudson Valley separately admitted receiving referrals for clinical care that included surgery and pathology. The alleged exchange ran in both directions: fees went to the practice, and referred patients brought government payments to the hospital.

A physician relationship can be valuable well beyond the physician’s own bill. Referrals feed hospital imaging, laboratory and surgical services. Medicare outpatient payments can include a hospital facility fee as well as a professional fee. Those downstream revenues help explain why hospitals value physician relationships. Here, the government connected the oncology fees to the reimbursements generated by the practice’s patients.

The government alleged that the arrangement violated both the Anti-Kickback Statute and the Stark Law. It alleged that the resulting Medicare and Medicaid bills violated the False Claims Act.

What the Contract Could Not Show by Itself

A study of eighty hospital-fraud cases published in the Journal of Forensic and Investigative Accounting in 2023 describes how service agreements can hide referral payments.

The study, Types of Hospital Frauds: Nature and Methods of Prevention, describes how fees for bogus consulting, rental and collection services can conceal referral payments. The paper explains what the disguise achieves: referring providers could take their bribes in a form that passed for legitimate pay.

For consulting work, the paper points to deliverables, meetings or receipts. It also describes how staff can notice unusual referral patterns.

At Hudson Valley, the monthly reports were part of the bargain. The melanoma center’s failure to develop and the incomplete IORT management work gave the missing records substance. Someone inside finance, contracting or the oncology service could explain how a fee continued when the promised work and its documentation did not keep up.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In Hudson Valley’s state settlement, the agreement specified a 20% whistleblower share of the payment New York State received.

UPMC Hamot’s Services Agreements Raised a Similar Question

The UPMC Hamot and Medicor settlement resolved allegations that twelve physician and administrative services arrangements secured referrals through work the hospital did not need. Some services allegedly duplicated other work or were never performed. The hospital and cardiology practice agreed to pay $20.75 million in the Justice Department’s settlement announcement on March 7, 2018.

That case adds another question to Hudson Valley’s missing-work problem: why was the hospital buying the service in the first place? Both cases put the services agreement alongside the referrals it allegedly secured.

When the Oncology Payments Kept Coming

If you saw who approved oncology fees, what work was missing or where the referrals went, speak with our whistleblower experts about those payments. Fees that outlast the work are the kind of thing only the people who saw both can explain. We stay beside you from that first account through the case, building it with whistleblower lawyers who know hospital referral and physician compensation arrangements.