The United States Attorney for the Southern District of New York announced on February 1, 2023, that the owner of a Brooklyn-based home health agency was sentenced to 54 months in prison for her leadership role in a broad fraud scheme that defrauded Medicaid for home health and personal care services that were not actually rendered, resulting in the loss of more than $100 million.
During the course of the scheme, which began in or around 2015, the defendant served in a senior, executive role at a licensed home care service agency based in Brooklyn, New York. In or about 2016, she and her co-conspirators opened a second licensed home care service agency based in Brooklyn. The defendant served as the owner of the second agency and also continued in her leadership role at the first agency.
From in or about 2015 to in or about December 2020, Medicaid reimbursed the two agencies hundreds of millions of dollars for home health and personal care services. A significant portion of the agencies’ billings were fraudulent. In particular, the agencies billed Medicaid for “no-show” cases in which nurse aides claimed to be performing home health or personal care services when they were not. At times when aides falsely claimed to be performing home health or personal care services, they in fact stayed home, ran personal errands, vacationed, and socialized with family and friends.
With no-show cases at the agencies, an aide’s fraudulently obtained wages were often split between the no-show aide and the no-show patient. In addition to paying kickbacks to no-show patients, no-show aides sometimes paid kickbacks to conspirators who referred no-show cases to aides at the agencies. The defendant and her co-conspirators also engaged in other fraudulent activity to boost the agencies’ billing and increase the amount of money paid out to the agencies.
Over the course of the scheme, the defendant received more than $5 million in compensation from the agencies. In addition to her prison term, the defendant was ordered to forfeit $1,496,000 and pay restitution of $36,328,183.
Compliance Perspective
Issue
It is illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs’ loss plus $11,000 per claim filed. Under the civil False Claims Act, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly. Facility staff should be knowledgeable in how to report suspicious billing practices. A nonretaliatory environment for reporting suspicious billing practices is mandatory for all facilities.
Discussion Points
- Review your policies and procedures for preventing and reporting a false claim and for conducting a Triple Check Process to verify accuracy of Medicare or Medicaid claims. Ensure that your policies are reviewed at least annually and updated when new information becomes available.
- Train all staff upon hire and at least annually on your compliance and ethics policies and procedures and on what can be considered a false claim. Provide training to appropriate staff on the Triple Check Process for ensuring accuracy of billing and supporting documentation before claims are submitted. Document that these trainings occurred and file the signed document in each employee’s education file.
- Periodically perform audits to ensure all staff are aware of compliance and ethics concerns and understand their responsibility to report any potential compliance and ethics violations to their supervisor, the compliance and ethics officer, or via the anonymous hotline.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
