Attorney General Schneiderman Cracks Down on Medicaid Fraud

The New York State Office of the Attorney General is responsible for investigating and prosecuting a vast quantity of crimes in the state of New York. While many of the more widely publicized investigations involve drug distribution and conspiracies, Medicaid fraud has become a growing trend in the state of New York, and Attorney General Schneiderman has been doubling down on Medicaid fraud in the recent years.

The Office of the Attorney General now has a Medicaid Fraud Control Unit dedicated to detecting Medicaid fraud at doctor’s offices, nursing homes, hospitals, non-profits, and more. State and federal taxpayer dollars fund New York’s Medicaid program, thus fraudulent use of Medicaid funds wastes taxpayer money. In addition, it diverts much-needed funding from worthy programs and patients.

RAIN, or Regional Aid for Interim Needs, is a non-profit designed to provide services to the vulnerable elderly population. These services include home attendants, senior centers, Meals-on-Wheels, social services, and senior housing complexes. These services are funded in part by state Medicaid dollars. Beginning in 2003, RAIN’s former Executive Director, Louis Vasquez, dipped into the Medicaid pot and diverted Medicaid funds from financing healthcare services for elderly residents in the Bronx to paying over $800,000 in mortgage payments for an empty building.

While Medicaid funds are commonly awarded to non-profits that qualify for them, these funds include limitations on their use. Non-profits enter into agreements with the NYC Human Resources Division. These agreements restrict the Medicaid funds to only covering services designed to help the elderly. Incidental expenses such as mortgages, office supplies, or employee paychecks cannot be paid for using Medicaid funds.

From 2003 to 2008, former Executive Director Vasquez used these Medicaid funds to pay the mortgage. In addition, Vasquez also used RAIN’s corporate American Express credit card to charge thousands of dollars’ worth of personal expenses. The Medicaid Fraud Control Unit, in conjunction with the New York City Department of Investigation, conducted an investigation into the fraud. RAIN agreed to settle with the state to avoid additional liability. RAIN agreed to pay back the entire $800,000 that was diverted from elderly services to mortgage payments. RAIN also agreed to implement internal controls and governance reforms to prevent reoccurrences in the future. Most importantly, RAIN agreed to change the members of the Board of Directors. Thus, on September 30, 2013, Vasquez was forced to resign. Vasquez is required under the settlement to pay back in full the American Express charges.

RAIN is a well-known and trusted non-profit in the Bronx community, and many elderly residents rely on the non-profit for much-needed services. These services are pertinent for the elderly residents’ welfare. Some residents require around-the-clock care or frequent visits by home health aide nurses. Others utilize Medicaid benefits to supply elderly friendly housing. RAIN provides invaluable services to the elderly community, and when RAIN’s funding is diverted to other areas such as paying mortgages, the elderly residents suffer.

Elderly residents are especially vulnerable because many rely on the benefits conferred by state Medicaid programs to get necessary medications, receive treatment, and obtain accessible housing. Sadly, Medicaid fraud is not a rarity. While whistleblower statutes have increased the prevalence of reporting, the Medicaid Fraud Control Unit at the Office of the Attorney General is growing increasingly busy with investigations.

In fact, while this case involved misappropriated funds, there are a plethora of other forms of Medicaid fraud. Common forms include: (1) billing for services that were never provided, (2) billing both Medicaid and private insurance, (3) billing for visits that never occurred, (4) billing for more time than was spent with the patient, (5) misrepresenting qualifications of health care professionals, (6) billing for name-brand drugs when generics were supplied, (7) billing for unnecessary tests or equipment, (8) billing for more tests or more comprehensive tests than were actually administered, (9) providing kickbacks to other healthcare partners, and (10) including costs for personal items in Medicaid reports.

If you suspect your health care provider, nursing home, non-profit service provider or pharmacist is violating the law and defrauding you, don’t sit idle. Contact the New York Medicaid fraud expert lawyers at the Law Offices of Thomas L. Gallivan, PLLC today or make a complaint directly to the New York State Office of the Attorney General.

A.G. Schneiderman Announces $800,000 Settlement with Bronx Nonprofit that Diverted Money Intended for Services for Elderly

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