TRENTON – Attorney General Gurbir S. Grewal announced today that the Division of Law has obtained a $718,000 settlement payout from the owner of a surgical center and three diagnostic imaging facilities who allegedly defrauded the State’s Charity Care Fund by under-reporting annual gross receipts from his businesses.

Under terms of the settlement, owner Harshad Patel of Edison and his businesses – AP Surgery Center, LLC and AP Diagnostics Imaging, Inc. – have already paid the New Jersey Department of Health (DOH) a total of $502,600. The remaining $215,400 in settlement funds has been paid to two relators who flagged the unlawful conduct – Allstate Insurance Company and the Medical Investigation Group.

AP Surgery Center is located in Edison, while AP Diagnostics Imaging, Inc., has locations in Edison, Jersey City and Newark.    

“This is an important settlement for New Jersey residents – not only because of the dollars involved, but because of the message it sends that we take seriously our responsibility to root out false claims activity and protect the State’s charitable health care assets,” said Attorney General Grewal. “Through our own efforts and in collaboration with our government and private partners, we are committed to ensuring that charity health care funding goes to help the people it was meant to help, and that unscrupulous health care service providers who cheat the fund are held accountable.”

”New Jersey' s charity care program provides $252 million in subsidies to hospitals for the care they provide our most vulnerable residents,” said Health Commissioner Dr. Shereef Elnahal. “Every dollar collected through assessments on health care facilities to support this program is valuable. The Department of Health applauds the hard work of the Attorney General's Office in holding accountable facilities that attempt to mislead the state.”

New Jersey’s Charity Care Fund (also known as the Health Care Subsidy Fund) is used to provide subsidies to hospitals that provide “charity” medical care – care for persons not covered by health insurance and who cannot afford to pay.

The fund is paid for, in part, by an annual assessment on the gross receipts of certain ambulatory care facilities, including surgical centers and diagnostic imaging facilities.

The ambulatory care facilities are required to file an annual report with DOH   listing their gross receipts. The department then notifies affected facilities of the amount they are being assessed based on their reported gross receipts.  For the years at issue in the Patel matter, the Charity Care Fund assessment was 2.95 percent of gross receipts.

For six years, Patel and his businesses allegedly under-reported their annual gross receipts on the forms they submitted to DOH, evading more than $1 million in Charity Care Fund assessments in the process.

Lara J. Fogel, Deputy Attorney General in the Division of Law’s Government Health Care Fraud Section, and Janine N. Matton, Assistant Attorney General in the Division’s Affirmative Civil Enforcement Practice Group, handled the Patel matter on behalf of the State. Relators Allstate Insurance Company and Medical Investigation Group, Inc., were represented by John Kennedy and Richard Vuernick of Kennedy Vuernick, LLC.

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