Anthony,

After reading the daily headlines (and short paragraph) in the
"Chronicle of Higher Education" that many of us receive on a daily
basis, it was nice to get an institutional overview of the
settlement and issues involved in the case.  It reminded me of the
Stanford issue, but hope that everyone involved is satified with the
outcome, and we can go on with educational research, without
being involved in Congressional hearings and revising Circulars, 3
or 4 times.

Thanks for answering questions in my mind,

John Case
Assistant Vice President and Controller
Desert Research Institute
Reno, Navada
(702) 673-7396

On Tue, 8 Apr 1997, Research Administration Discussion Group wrote:

> fyi
>
> Tuesday April 8 5:42 AM EDT
>
> NYU Medical to Pay Record Fraud Settlement
>
> New York University Medical Center agreed to pay a record $15.5 million
> to settle civil charges that it used false information to obtain inflated
> federal research grant
> reimbursements, prosecutors said Monday.
>
> The settlement is the largest payment by a university for claiming too much
> in indirect costs
> associated with federally sponsored research, the government said.
>
> "Health care fraud and rising costs are at crisis levels in this country,"
> Mary Jo White, U.S.
> Attorney for the Southern District of New York, said.
>
> This settlement demonstrates the government's strong resolve to combat
> abuses and overcharges by
> educational institutions and to ensure that no institution receives more
> than its fair share of limited
> federal research funds.
>
> The settlement is unusual is that it combines a monetary damage recovery
> along with the finalization
> of a rate negotiation.
>
> Over the years NYU, like other universities, has negotiated indirect cost
> rates with the Department
> of Health and Human Services' Division of Cost Allocation.
>
> One part of the settlement addresses allegations that NYU Medical Center
> provided false
> information to the government in negotiations over the center's indirect
> cost rates for the fiscal years
> 1982 through 1993. These are the rates at which indirect costs are
> reimbursed on NYU Medical
> Center's federally sponsored research grants and contracts.
>
> Another part of the settlement covers rate negotiations for indirect costs
> for fiscal years 1994-1997.
> NYU Medical Center said that the rates for these years had previously been
> agreed to on a tentative
> basis with the DHHS and the settlement provided an opportunity to reach a
> finalization.
>
> The center said a significant portion of the settlement funds this
> finalization of rates. It said this
> portion is not related to the false claims allegations.
>
> Although the medical center has agreed to pay the $15.5 million, it denied
> any wrongdoing. It said
> in a statement that it settled the suit to avoid the expense of protracted
> litigation with the
> government.
>
> "The medical center has worked closely with the government since first
> being advised of the
> existence of the complaint in July 1995 and we are pleased to have this
> matter resolved. As the
> settlement agreement makes clear, we do not believe there was any
> intentional wrongdoing or
> liability," it said.
>
> The government's complaint alleged that the medical center provided false
> information in a number
> of different ways. Among allegations is that it submitted duplicate claims
> for the same costs in its
> research related indirect costs proposals and in the hospital reports
> submitted for reimbursement by
> Medicare, a separate federal program.
>
> The government also alleged that duplicate claims were submitted for
> certain environmental services
> costs by NYU Medical Center and New York University. Other alleged
> violations included
> unallowable expenses relating to entertainment, capital interest and
> overstatement of housekeeping
> expenses.
>
> The original suit was filed in December 1993 by Emmanuel Roco, a former NYU
> Medical Center
> assistant manager of financial studies, who brought the action under a
> federal law that allows an
> individual to file a complaint on behalf of the government and to share in
> the proceeds of the action.
>
> Prosecutors said they had reached an agreement with Roco under which he
> will receive more than
> $1.5 million. The figure was approved by a federal judge Monday.
>
>
>
> *****************
> Anthony M. Boccanfuso, Ph.D.
> Director
> Office of Sponsored Programs and Research
> Bowling Green State University
> Bowling Green, Ohio 43403
> 419-372-2481; 419-372-0304 (fax)
> xxxxxx@bgnet.bgsu.edu
> http://www.bgsu.edu/offices/spar/HomePage.html
>