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Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Wednesday, March 28, 2018

Manhattan U.S. Attorney Announces $10 Million Settlement Of Civil Fraud Lawsuit Against Centerlight Healthcare For Collecting Medicaid Payments For Services Often Not Provided To Adult Home Residents

CenterLight Healthcare Admits That 186 Adult Home Residents Did Not Receive Required Services During Certain Months and That It Failed to Timely Dis-enroll Residents From Its Managed Long-Term Care Plan

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge for the New York Office of Inspector General of the U.S. Department of Health and Human Services (“HHS-OIG”), announced today a settlement of a civil fraud lawsuit against CenterLight Healthcare, Inc. (“CENTERLIGHT”), for collecting monthly Medicaid payments for 186 adult home residents who frequently did not receive required services while enrolled in CENTERLIGHT’s managed long-term care plan. 

The settlement resolves allegations that CENTERLIGHT submitted false claims to Medicaid to receive these payments.  Under the terms of the settlement approved yesterday by U.S. District Judge Lewis A. Kaplan, CENTERLIGHT must pay a total sum of $10 million, with $4 million going to the United States and the remaining amount going to the State of New York.  In the settlement, CENTERLIGHT admits that the 186 adult home residents did not receive community-based long-term care services during certain months that they were enrolled in CENTERLIGHT’s managed long-term care plan.  “CENTERLIGHT also admits that it failed to timely dis-enroll these adult home residents from its plan and that, as a result, CENTERLIGHT collected Medicaid payments to which it was not entitled.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “CenterLight Healthcare collected millions of dollars in Medicaid payments to provide long-term care services to adult home residents in its managed care plan, but frequently failed to deliver these services.  This Office is committed to holding recipients of government health care funds accountable when they fail to provide the care and services the government pays them to provide.” 

HHS-OIG Special Agent in Charge Scott J. Lampert said:  “CenterLight’s conduct compromised the integrity of the Medicaid program and failed to ensure that quality health care services were provided to those that needed them most.  HHS-OIG is committed to holding providers accountable for their practices.”

CENTERLIGHT administered a managed long-term care plan for Medicaid beneficiaries pursuant to a contract with the New York State Department of Health (the “Contract”).  To be eligible for enrollment into a managed long-term care plan, a Medicaid beneficiary must, among other things, be assessed as needing community-based long-term care services for more than 120 days from the effective date of enrollment.  These services include nursing services in the home, therapies in the home, home health aide services, personal care services in the home, and adult day health care.  In exchange for arranging and providing these services, CENTERLIGHT received monthly payments of approximately $3,600 - $3,800 for each member.  CENTERLIGHT contracted with licensed home care services agencies that were supposed to provide skilled nursing and home health aide services to the hundreds of adult home residents enrolled in CENTERLIGHT’s managed long-term care plan.  

As alleged in the United States’ Complaint filed in Manhattan federal court, CENTERLIGHT did not ensure that these agencies consistently provided required services to adult home residents, and failed to ensure that these vulnerable members’ medical needs were met.  Despite being aware that some of the agencies it hired provided a substandard level of care and did not maintain proper documentation reflecting the services provided, CENTERLIGHT failed to promptly take necessary steps to address these issues.  With respect to the 186 adult home residents who are the subject of the settlement (the “186 Members”), CENTERLIGHT submitted or caused to be submitted claims to Medicaid for payments for months during which no community-based long-term care services were provided to the member.  Indeed, many of the 186 Members did not receive any community-based long-term care services for most of the months during which they were enrolled in CENTERLIGHT’s managed care plan.

As part of the settlement, CenterLight Healthcare admits, acknowledges, and accepts responsibility for the following conduct:

  • The 186 Members did not receive required community-based long-term care services during certain months that they were enrolled in CENTERLIGHT’s managed long-term care plan. 
  • CENTERLIGHT failed to timely dis-enroll the 186 Members even though they were no longer eligible for its managed long-term care plan and, as a result, CENTERLIGHT received capitation payments to which it was not entitled.
  • CENTERLIGHT failed to adequately oversee and monitor the care provided by the home care services agencies to the 186 Members to ensure that these members received the services required by the Contract.

In connection with the filing of the lawsuit and settlement, the Government joined a private whistleblower lawsuit that had been filed under seal pursuant to the False Claims Act.  The Government previously intervened in this whistleblower lawsuit and, in January 2016, entered into a $46.7 million settlement with CENTERLIGHT to resolve allegations relating to the use of social adult day care centers to enroll ineligible members in CENTERLIGHT’s managed long-term care plan.  CENTERLIGHT sold its managed long-term care plan in early 2017.

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Mr. Berman thanked the Office of the Inspector General for HHS for its assistance.  Mr. Berman also thanked the Medicaid Fraud Control Unit of the New York State Attorney General’s Office for its investigative efforts and work on the case.    

The case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Jeffrey K. Powell is in charge of the case.  

Topic(s): 
Health Care Fraud
Press Release Number: 
18-094
Updated March 28, 2018