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Press Release

Manhattan U.S. Attorney Announces $46.7 Million Settlement Of Civil Fraud Claims Against Centerlight Healthcare For Enrollment Of Ineligible Individuals In Medicaid Managed Long-Term Care Plan

For Immediate Release
U.S. Attorney's Office, Southern District of New York
CenterLight Healthcare Admits Collecting Medicaid Payments for 1,241 Ineligible Managed Long-Term Care Plan Members Who Attended or Were Referred by Social Adult Day Centers

            Preet Bharara, the United States Attorney for the Southern District of New York, and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (“HHS-OIG”), announced today that the United States has settled civil fraud claims under the False Claims Act against CenterLight Healthcare, Inc., and CenterLight Health System, Inc. (collectively, “CenterLight”), for the enrollment of ineligible members in the CenterLight Healthcare managed long-term care plan (“CenterLight MLTCP”).  CenterLight improperly billed the Medicaid program for 1,241 members who attended or were referred by social adult day care centers (“SADCCs”) and whose needs did not meet the criteria of the managed care plan.  The settlement resolves claims that CenterLight engaged in improper marketing practices to enroll members through SADCCs and induced such members to use SADCCs as the members’ primary source of personal care services.  CenterLight continued to seek and obtain monthly capitation payments for members well after the New York State Department of Health issued guidance in early 2013 explicitly stating that an individual’s attendance at SADCCs does not satisfy the MLTCP eligibility standard.

            Under the terms of the settlement approved yesterday by United States District Judge Lewis A. Kaplan, CenterLight must pay a total of $46,751,086.74 to the Medicaid Program, $18,700,434.70 of which will go to the United States.  In addition, CenterLight is required to:

  • Comply with all contractual and regulatory requirements governing the enrollment, assessment, re-assessment, and dis-enrollment of CenterLight MLTCP members.

  • Credential only SADCCs that are properly certified and capable of providing community-based personal care services consistent with regulatory requirements.

  • Monitor SADCCs in its provider network to ensure that they furnish the community-based personal care services called for under CenterLight MLTCP member care plans and operate in compliance with applicable regulations.

  • Prohibit marketing practices that are directed at enrolling CenterLight MLTCP members through SADCCs.

            Manhattan U.S. Attorney Preet Bharara said:  “CenterLight Healthcare improperly received millions of Medicaid dollars by enrolling ineligible members into its managed care plan.  With this settlement, CenterLight now has admitted to its conduct and will pay over $46 million.  We are committed to holding health care providers accountable if they wrongfully seek and receive federal funds, and we thank HHS’s Office of the Inspector General and the New York State Attorney General’s Office for their assistance.”   

            HHS-OIG Special Agent in Charge Scott J. Lampert said:  “CenterLight’s conduct compromised the integrity of the Medicaid program by enrolling beneficiaries in a plan for which they were not eligible.  HHS-OIG is committed to holding providers accountable for their practices, and the manner in which care is provided.”                       

            Pursuant to the Medicaid managed long-term care program, health care providers, such as CenterLight, are responsible for arranging and managing long-term health care services offered to Medicaid beneficiaries.  In exchange, providers receive a monthly capitation payment of approximately $3,800 for each beneficiary enrolled in the health care plan.  MLTCPs offer a variety of services, including assistance with activities of daily living, care management services, skilled nursing services, physical therapy, occupational therapy, speech therapy, nursing home care, and preventive services.  In order to qualify for enrollment in an MLTCP, Medicaid beneficiaries need to, among other things, be eligible for a nursing home level of care and require at least 120 days of community-based long-term care, which includes a wide range of health care services such as personal care services.  CenterLight contracted with SADCCs to provide care, including personal care services, to CenterLight MLTCP members. 

            In the settlement agreement, CenterLight admits that 1,241 CenterLight MLTC members who had been referred by SADCCs or had used SADCC services were not eligible to be members of the managed care plan.  Many of these ineligible members were not eligible at the time of their initial enrollment, while others were ineligible to remain in the managed care plan at the time of their re-assessment but were not dis-enrolled in a timely manner.  Although the SADCCs were supposed to be providing care to CenterLight members, CenterLight admits that various SADCCs in its provider network did not provide services that qualified as personal care services under the terms of its Medicaid contract or were not legally permitted to provide such services. 

*                *                *

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

            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.

Updated January 21, 2016

Press Release Number: 16-020