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Justice News

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

FOR IMMEDIATE RELEASE
Thursday, November 6, 2014

Manhattan U.S. Attorney Settles Civil Fraud Claims Against Visiting Nurse Service For Obtaining Millions In Medicaid Payments By Enrolling Ineligible Individuals In Its Managed Long-Term Care Plans And For Providing Substandard Services At Social Adult

VNS Admits And Acknowledges That 1,740 Managed Long-Term Care Plan Members Were Ineligible And Agrees To Pay Nearly $35 Million

Preet Bharara, the United States Attorney for the Southern District of New York, and Thomas O'Donnell, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, announced today that the United States has settled civil fraud claims under the False Claims Act against VISITING NURSE SERVICE OF NEW YORK, VNS CHOICE, and VNS CHOICE COMMUNITY CARE (collectively, “VNS”) related to the enrollment of ineligible members in the VNS Choice managed long-term care plan (“Choice MLTCP”). VNS improperly billed the Medicaid program for 1,740 members whose needs did not qualify for the managed care plan. These members were improperly referred by social adult day care centers (“SADCCs”), or received services primarily from SADCCs, many of which provided substandard and minimal care.

Under the terms of the settlement approved today by United States District Judge Ronnie Abrams, VNS must pay a total of $34,994,428 to the Medicaid Program, $13,997,771 of which will go to the United States. In addition, VNS is required to:

  • Credential only SADCCs that are properly certified and capable of providing community-based personal care services consistent with regulatory requirements
  • Ensure that SADCCs provide the community-based personal care services called for under Choice MLTCP member care plans
  • Monitor SADCCs in its provider network to ensure compliance with applicable regulations
  • Prohibit marketing practices specifically directed at enrolling Choice MLTCP members through SADCCs

Manhattan U.S. Attorney Preet Bharara said: “VNS collected millions of dollars in Medicaid payments by enrolling ineligible persons into its managed care plan who clearly did not meet the criteria for long-term care. The company developed a network of social adult day care centers that were ill-equipped to provide the required level of care and instead served merely as a conduit to induce Medicaid beneficiaries to enroll.”

HHS-OIG Special Agent in Charge Thomas O'Donnell said: “VNS’s conduct compromised the integrity of the Medicaid program. HHS-OIG is committed to holding providers accountable for the quality of care they deliver and the manner in which that care is provided.”

Pursuant to the Medicaid managed long-term care program, health care providers, such as VNS, 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 $3800 for each beneficiary enrolled in the health care plan. In order to qualify for enrollment in the Choice MLTCP, Medicaid beneficiaries need to 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. VNS contracted with SADCCs to provide care, including personal care services, to Choice MLTCP members.

In the settlement agreement, VNS admits that 1,740 Choice MLTC members who had been referred by SADCCs or used SADCC services were not eligible to be members of the plan. These members were eventually unenrolled, beginning in August 2013. Although the SADCCs were supposed to be providing care to VNS Choice members, VNS admits that, during 2012 and 2013, various SADCCs in its provider network did not provide services that qualified as personal care services under the terms of its Medicaid contract. The settlement also resolves claims that VNS Choice improperly received referrals from SADCCs and induced members to use SADCCs as the members’ primary source of personal care services.

In April 2013, New York State had suspended enrollment in the Choice MLTCP based on concerns regarding the relationship between VNS and SADCCs. This suspension remained in effect until the Government reached an agreement in principle to resolve its investigation.

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

Visiting Nurse Service Settlement

14-326
Updated May 15, 2015