N.Y. Home Health Agency Pays $35 Million to Settle False Medicaid Claims

The Visiting Nurse Service of New York (VNSNY) last week agreed to pay about $35 million to settle claims that it improperly billed Medicaid for services related to member enrollment in the organization’s adult day centers.

Under the terms of the settlement approved by U.S. District Judge Ronnie Abrams, VNSNY must pay a total of $34,994,428 to the Medicaid program, of which $13,997,771 will go to the U.S.

The settlement resolves claims that VNSNY improperly billed Medicaid for 1,740 members whose needs did not qualify for enrollment in the organization’s VNS Choice managed long-term care plan (Choice MLTCP).


As a result, these members were alleged to be improperly referred by social adult day care centers, or received services primarily from these adult care centers, many of which federal investigators claimed provided substandard and minimal care.

“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,” said Manhattan U.S. Attorney Preet Bharara in a written statement. “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.”

In the settlement agreement, VNSNY admitted that 1,740 Choice MLTC who had been referred by social adult day care centers, or used those the services those facilities provide, were not eligible to be members of the plan. These members were eventually unenrolled, beginning in August 2013.


Although the adult day care centers were supposed to be providing care to VNS Choice members, VNSNY admitted that during 2012 and 2013 various centers 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 the adult day centers and induced members to use them as the members’ primary source of personal care services.

As part of the settlement terms, VNSNY is required to credential only social adult day care centers that are certified and capable of providing community-based personal care services consistent with regulatory requirements.

The organization is also required to ensure that these centers provide the community-based personal care services called for under Choice MLTCP member care plans, as well as monitor the centers that provide these services in its provider network to ensure their compliance. VNSNY is also prohibited to engage in marketing practices that are specifically directed at enrolling Choice MLTCP members through the adult day centers.

Already, VNSNY has taken taken action to address issues identified by the New York State Department of Health (DOH) and has cooperated with inquired from state officials, according to a statement from the DOH.

“VNSNY has been and continues to be a vital part of New York’s health care safety net for the most vulnerable and is an exemplary steward of the public health,” VNSNY said in a statement.

VNSNY Choice and New York’s DOH had different interpretations of the eligibility requirements for health plan members, and VNSNY, in its efforts to embrace the goals of the State’s Medicaid Redesign reforms, reached eligibility determinations that were at odds with the State’s own view of its evolving standards, said VNSNY Spokesman Mike McKeon in a written statement.

“Once this difference in understanding became apparent, VNSNY Choice immediately developed, presented and undertook a comprehensive action plan to ensure full and immediate alignment with current DOH policies,” McKeon said.

Written by Jason Oliva

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