Breon Peace, United States Attorney for the Eastern District of New York, and Letitia James, New York State Attorney General, announced today a pair of settlement agreements with two Brooklyn-based licensed home care services agencies (LHCSA), All American Homecare Agency (All American) and Crown of Life Care NY LLC (Crown of Life). The settlement agreements address allegations that All American and Crown of Life violated the federal False Claims Act and New York State’s False Claims Act in claiming that they paid their home care aides the minimum wages required under New York State law. 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.
“It is outrageous to cheat home health aides of their hard earned benefits guaranteed under New York law and the Medicaid program,” stated United States Attorney Breon Peace. “These settlements reflect this Office’s firm commitment to preventing fraud in government programs and protecting home health aides—who perform physically and emotionally taxing work in caring for some of the members of our community most in need.”
Mr. Peace thanked the Medicaid Fraud Control Unit of the Office of the New York State Attorney General for its partnership in the government’s investigation and resolution of this important case.
“Home health aides provide critical care for our most vulnerable, and they must be fairly compensated for their work,” said Attorney General James. “Not only did these companies shamelessly cheat their workers, they also cheated our state and stole from communities that need it most. My office will never tolerate fraud of any kind, and we will continue to do everything we can to ensure that New Yorkers get their fair pay and treatment.”
The New York Wage Parity Act, Public Health Law sets minimum wage and benefit requirements for LHCSAs that employ home care aides who render services to Medicaid recipients in New York City and in Nassau, Suffolk or Westchester Counties. 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. Today, the minimum amount of total compensation for an aide in New York City is $19.09 per hour; for Nassau, Suffolk, and Westchester Counties, the minimum is $18.22 per hour.
Home health aides perform all aspects of personal care for sick or homebound patients and frequently work long shifts lasting up to 24 hours. The tasks performed in caring for patients are demanding and can consist of assisting or lifting patients out of bed and bathing, dressing, grooming, preparing meals and, in some instances, feeding them. Patients may suffer from physical or mental disorders that can make the work of the aides physically and emotionally taxing. In fact, it was in recognition of the difficulty of this work that New York passed the Wage Parity Law.
This Office, in coordination with the New York State Attorney General’s Office’s Medicaid Fraud Control Unit, commenced 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 All American and Crown of Life falsely certified their compliance with the law and sought and received reimbursement from Medicaid.
Under the terms of its agreements with the United States and New York State, All American has paid $1.6 million to the United States and $2.4 million to New York State. The settlement covers All American’s conduct in the years 2014 to 2017. Crown of Life has agreed to pay $560,000 to the United States and $840,000 to New York State, for conduct that took place in the years 2014 to 2018.
In addition to the payments to resolve the government’s fraud claims, All American and Crown of Life are now paying their aides the wages and benefits they were required to pay under the Wage Parity Law, including the wages that were owed to current and former aides in prior years. Moreover, both All American and Crown have admitted, acknowledged and accepted responsibility for underpaying their home health aides by failing to pay Wage Parity Law rates.
The case is being handled by Assistant U.S. Attorneys Michael Blume and Sean Greene-Delgado of the Office’s Civil Division. Assistant U.S. Attorney Matthew Mailloux, now with the District of New Jersey, handled the matter when he was with the Eastern District of New York.