Two NY Home Healthcare Agencies Settle False Claims Act Allegations for $5.4 Million

Two New York home healthcare agencies settled with the Department of Justice (DOJ) and the New York State Attorney General’s Office for allegations of violating the federal False Claims Act and New York State’s False Claims Act. The agencies had claimed that they paid their home care aides the minimum wages required under New York State law, when they were in fact underpaid. The agencies received millions of dollars in funding from Medicaid, which is funded in part by the federal government, and much of that money was meant to pay the wages and benefits of their aides.

The New York Wage Parity Act, Public Health Law sets minimum wage and benefit requirements for licensed home care services agencies (LHCSAs) that employ home care aides who render services to Medicaid recipients in New York City and three counties in New York. Under the Wage Parity Law, which is funded by Medicaid, aides are to be paid a minimum amount in total compensation. That compensation comes in the form of a base wage and a supplemental benefit. The base wage must be paid in cash. The benefit portion can include the value of vacation, holiday, and sick pay, among other things. It can also include health insurance, pension plans, or educational assistance.

The DOJ, in coordination with the Medicaid Fraud Control Unit of the Office of the New York State Attorney General, began an investigation after whistleblowers alleged that certain LHCSAs had knowingly defrauded the federal government and New York State by underpaying home health aides in violation of New York’s Wage Parity Act. The government’s investigation revealed that two agencies falsely certified their compliance with the law and sought and received reimbursement from Medicaid.

Under the terms of agreement, one of the agencies has paid $1.6 million to the Unites States and $2.4 million to New York State for conduct between 2014–2017. The other agency has agreed to pay $560,000 to the United States and $840,000 to New York State for conduct that occurred in 2014–2018. Additionally, the agencies are currently paying their aides the wages and benefits that are required under the Wage Parity Law, including the wages that were owed to current and former aides in prior years.

Compliance Perspective

Issue

It is imperative that all employees who are responsible for determining rates of pay, deciding overtime pay eligibility, and performing recordkeeping of wages are well trained in the Fair Labor Standards Act and any supplemental benefits. Facilities should also be knowledgeable in their state or county requirements. Violations can result in fines and other penalties.

Discussion Points

    • Review your policies and procedures on fair wages, overtime pay eligibility, and recordkeeping. Additionally, review your policies on your state and county requirements, if applicable. Update as needed.
    • Train all staff who have responsibility for ensuring fair wages, overtime pay eligibility, and recordkeeping about your policies and procedures, and ensure they demonstrate competence with the requirements. Additionally, staff should be familiar with their state and county requirements. Document that these trainings occurred, and file each signed document in the employee’s education file.
    • Periodically audit to ensure that fair wages, overtime pay eligibility, and the recordkeeping of hours worked are accurate and being reported correctly. Facilities should also audit to ensure that any state and county requirements are being fulfilled.

 

*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*

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