News and Press Releases

Home Health Care Agency Agrees to Pay $6 Million to Resolve Civil Fraud and Administrative Overpayment Claims

September 29, 2006

Roslynn R. Mauskopf, United States Attorney for the Eastern District of New York, announced that VISITING NURSE ASSOCIATION OF BROOKLYN (“VNAB”) has agreed to pay nearly $3.8 million in damages and penalties in two civil health care fraud cases and more than $2.3 million in overpayments.

In the first case, the United States intervened and filed its own complaint in an action originally brought by a private party under the civil False Claims Act. Without admitting liability, VNAB will pay $1,886,704 to settle allegations that it improperly characterized various expenditures in its annual Medicare and Medicaid cost reports for 1991 through 2000, and obtained reimbursement for costs that were not allowable. These costs included unauthorized bonuses paid to VNAB executives, excess pension contributions made for the benefit of certain executives, personal travel costs, and attorney fees expended in defense of this fraud litigation. The settlement amount includes double damages incurred by the Medicare program and double damages for the federal portion of the Medicaid frauds.

The second case was brought by VNAB and challenged the Department of Health and Human Services (“HHS”) reduction of its Medicare reimbursement rate for home health aide services in 1995. The government filed counterclaims under the False Claims Act based on VNAB’s reporting of inflated data and false statements in its cost reports for 1995 and 1996. The district court upheld HHS’s rate reduction and granted summary judgment to the United States on its counterclaims. Subsequently, the United States and VNAB reached a settlement. With respect to the court case, VNAB is paying $1,892,703, which represents double damages less amounts already recouped by HHS through the administrative overpayment process. In addition, VNAB is paying $2,304,182 to settle potential administrative claims for 1989 through 1994, and has agreed to withdraw a related mandamus action and all administrative appeals relating to the computation of its Medicare reimbursement rates for home health aide services for 1989 through 2000.

“Health care providers who violate the rules will be held accountable to the full extent of the law,” stated United States Attorney Mauskopf. “The settlements reached in these two cases reflect our continuing commitment to vigorously investigate and prosecute fraud in the Medicare and Medicaid Programs.”

The government’s cases were handled by Assistant United States Attorneys Richard K. Hayes and Kathleen A. Mahoney, who were assisted by Affirmative Civil Enforcement Auditor Emily Rosenthal. In the second case, substantial assistance was provided by United Government Services, the fiscal intermediary responsible for reviewing VNAB’s Medicare cost reports pursuant to contract with the Centers for Medicare & Medicaid Services.