New York Home Health Agency to Pay $6 Million Medicaid Fraud Settlement

Empire State Home Care Services, a New York-based home care agency, has agreed to a $6 million settlement following a Medicaid billing audit, New York Attorney General Eric Schneiderman announced Monday.

The audit revealed Empire improperly billed Medicaid by reporting salaries and benefits of administrative personnel under direct care cost centers between 2002 and 2005 and received inflated reimbursements, according to Schneirderman’s office. The reporting allegedly resulted in more than $3 million in Medicaid reimbursements Empire was not entitled to between 2004 and 2007. 

“Many New Yorkers count on Medicaid for important health services, and I will continue to safeguard Medicaid funds to ensure they are being used for their intended purpose,” Attorney General Schneiderman said in a statement. “When Medicaid reimbursements are inflated by providers, it causes funds to be diverted from those most in need.”


The $6 million settlement resolves these claims and consists of the more than $3 million in undue reimbursements plus penalties that Empire has agreed to pay back over 12 years. The audit also noted that Empire improperly allocated certain home office costs under direct care costs and received inflated Medicaid reimbursements for this reporting.

Empire admitted no wrongdoing in the settlement, the Wall Street Journal reported. 

“We are not admitting that there was any misreporting here,” Raul A. Tabora Jr., an attorney representing Empire, told the WSJ.


Empire State Home Care Services could not be reached for comment by press time.

As an industry where most patients are receiving care in private settings, regulation and monitoring individual agencies can be challenging. This lack of oversight has sparked a heightened interest in fraud cases, particularly in states where high numbers of residents rely on Medicaid.

Schneiderman has increased the size of New York’s Medicaid Fraud Control Unit, adding dozens of prosecutors, investigators and auditors since his first weeks in office. The office has recovered more than $1 billion in Medicaid fraud cases from nearly 300 convictions since July 2011, when Schneiderman took office, the WSJ reported.

Nationwide, Medicaid Fraud Control Units reported 1,318 criminal convictions in 2014, according to the U.S. Department of Health and Human Services and Office of Inspector General. About three-quarters of these convictions were for fraud.  

Written by Amy Baxter 

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