Large Nonprofit Agency Accused of Massive Medicare Fraud

One of the largest nonprofit home health care agencies in the country, the Visiting Nurse Service of New York (VNSNY), is being sued by the former vice president of operations improvement and integration, Edward Lacey.

Lacey is accusing the organization of systematically extracting hundreds of millions of dollars from Medicare and Medicaid, The New York Times reported Friday.

The VNSNY is a nonprofit organization that provides home health care services to about 150,000 patients per year in the state. The agency delivers skilled nursing care, rehabilitation therapy and behavioral health therapy for short-term care for patients in their homes.


The lawsuit brought by Lacey is under federal and state False Claims Acts and claims that the VNSNY billed Medicare and Medicaid for false and improper services as well as bamboozling patients out of the care that was ordered by their doctors, The New York Times article said.

“VNSNY is proud of the quality and integrity of its nursing and home health services,” Richard Rothstein, vice president of enterprise communications, told Home Health Care News in an email. “We will defend this case vigorously and we are confident that we will prevail.”

The suit was originally filed in the United States District Court for the Southern District of New York in 2014, but had been under seal until last week. Since the suit was filed in 2014, it has been under confidential investigation by federal and state authorities, according to The NYTimes.


The lawsuit charges that the agency “intentionally ignored” the plans of care prescribed by physicians and provided only a fraction of the nursing and rehabilitation visits that had been ordered under Medicare, all for financial gain.

There were a number of patient records cited in which patients received an order from their doctor to have a certain number of rehabilitation visits and/or nursing visits, but in some cases the visits were not completed, yet VNSNY collected the government reimbursements.

The suit also alleges that VNSNY falsified service records for hundreds of agency nurses and therapists as well as billed for home health aides from vendor agencies that were either not provided at all or were not properly supervised, the report said.

Rothstein however sharply criticized The New York Times on their reporting of the case. He pointed out that the federal and state authorities declined to join in the whistleblower suit, finding the allegations “insufficiently substantiated.”

“If The New York Times considers this self-serving and baseless whistleblower complaint to be news, this would be a clear departure from the standards of journalistic integrity to which it holds itself and its reporters, and nothing more than an intentional effort to smear VNSNY’s name and reputation,” Rothstein said.

This is not the first time the VNSNY has been under investigation, the Times noted. In recent years the agency has had many audits, investigations and legal actions taken against it including repaying $33.6 million to Medicaid in 2013 after enrolling ineligible patients for its adult day care services.

Written by Alana Stramowski

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