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September 18, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Westchester Medical Center says patient dodged $1.5M payment by circumventing bankruptcy rules

Seven years after Barbara Lucena and her baby boy were released from Westchester Medical Center in Valhalla, the hospital is suing her for more than $1.5 million.

WMC filed the lawsuit in federal bankruptcy court in Poughkeepsie on Sept. 9, claiming that Lucena obtained health insurance payments by fraud and then intentionally failed to notify the hospital when she filed for bankruptcy protection.

“My client admits improperly retaining funds sent to her,” Lucena’s attorney, Simon Haysom of Goshen, said in a court pleading. But if WMC chooses to litigate the issue, he said, she will raise questions about medical treatment that “resulted in a child with multiple deformities and diseases.”

WMC treated Lucena for 10 days and her baby boy for 109 days in 2011.

The hospital billed Empire Blue Cross Blue Shield, her health insurance provider, but Empire sent the payments directly to Lucena. She cashed three checks totaling $1,516,914.

WMC sued Lucena in Westchester Supreme Court to recover the payments. She failed to respond, and in 2012, the court awarded the hospital a default judgment for the full amount plus interest, $1.55 million.

Five years ago, WMC collected $6,731 by forcing an auction of a vehicle. Since then, it has received no payments.

Then in 2016, Lucena, of Port Jervis, filed for Chapter 7 bankruptcy liquidation. She declared $12,863 in assets and $483,046 in liabilities. A Wells Fargo custodial account in her son’s name had $100.

A bankruptcy trustee found no assets that could be distributed to creditors. In January 2017, Judge Cecelia G. Morris discharged Lucena’s debts and closed the case.

In June, WMC asked the court to reopen the case, accusing Lucena of failing to notify the hospital in an attempt to circumvent it from appearing in proceedings.

Lucena had named the hospital as a creditor, WMC stated, but the address she listed was for Westchester Supreme Court in White Plains and the amount was for less than $2,000. As a court officer for Port Jervis City Court, the hospital claimed, Lucena knew the address was wrong.

“My client has no objection to the reopening of the case,” Haysom said in the court pleading.

Judge Morris reopened the case on Aug. 3 and authorized the hospital to file an adversary proceeding.

WMC argues that Lucena had obtained money by fraud; therefore, her debt should not have been canceled. The hospital’s attorney, Cooper J. Macco of Macco & Stern in Islandia, New York, is asking the court to revoke the discharge of debt and enter a judgment for repayment of the debt.

When Haysom agreed to reopen the bankruptcy case, he said Lucena had given proper notice to Westchester County Healthcare Corp., WMC’s parent company, by giving notice to an affiliate, Bon Secours Medical Group.

He said Lucena regrets retaining the checks, “but, at the time, she was considering a malpractice suit against WMC for considerably more money.”

He said Lucena missed a 90-day deadline for filing a lawsuit, and thus WMC “has avoided liability over the years.”

Lucena does not hold a grudge against the hospital, Haysom said, and she believes it is a first-rate medical center.

But if WMC chooses to litigate for fraud, “they will have to litigate the appalling results of my client’s treatment in June 2011.”