United States v. Healthwin-Midtown Convalescent Hospital & Rehabilitation Center, Inc.

Opinion and Order

This is an action by the United States to recover Medicare funds paid to the Healthwin-Midtown Convalescent Hospital and Rehabilitation Center, Inc. (Healthwin). The defendants are Healthwin and Israel Zide, its former president and owner of fifty percent of its stock.

The facts are as follows: On September 14, 1971, Healthwin was organized in California for the purpose of operating a health care facility. From that date, until November 30,1974, it participated as a provider of services under the Medicare Act, 42 U.S.C. § 1395 et seq., and received periodic payments from the United States Department of Health, Education and Welfare (HEW). These payments, which were compensation for the services provided Medicare beneficiaries by Healthwin, were only approximations of the exact amount due; the exact amount was determined by periodic audits conducted by Blue Cross of Southern California which was HEW’s agent for the purpose of paying Healthwin and auditing its cost reports. It is undisputed that these audits showed that a series of overpayments had been made to Healthwin in 1972, 1973 and 1974 in the total amount of $30,-481.55. It is this sum, plus interest,…