Investigators: Rochester Home Health Agency Fraudulently Billed Medicaid for $2.5 Million

The New York State Attorney General’s office and Home Health Care of Rochester (HCR), which employs 600 people, reached a $2.5 million settlement in January 2014 after investigators from the Medicaid Fraud Control Unit (MFCU) discovered that the healthcare agency fraudulently billed Medicaid over a period of four years. As part of the settlement, HCR agreed to pay back $2,503,392, plus interest, to Medicaid.

check.jpgUnder Medicaid rules, healthcare companies can only bill the agency for costs directly associated with patient care. However, in an audit of HCR’s records from 2002 through 2006, MFCU investigators uncovered that the company was billing Medicaid for expenses unrelated to patient care. For instance, HCR billed Medicaid to pay for executives’ country club dues. In addition, HCR billed the agency for advertising costs and the salaries of employees in the marketing department. Moreover, HCR submitted bills to pay for company cars, as well as interest from business loans not offset by investment income.

The investigation also revealed that HCR improperly billed Medicaid for over 6.500 hours of work performed by 23 aides who were not properly certified by the state. The company claims that it did not know that the workers were not properly trained. In addition, investigators discovered that several aides falsified time sheets by inflating the number of hours that they worked at Rochester’s The Shire at Culverton Adult Care Facility, an HCR client.

Commenting on the multimillion dollar fraud settlement, Attorney General Eric T. Schneiderman stated, “When providers rip off Medicaid for costs unrelated to healthcare, New York’s most vulnerable patients and taxpayers are directly harmed. My office’s Medicaid Fraud unit is designed to root out this kind of malfeasance, to make our taxpayers whole, and to ensure our neediest patients get the care they need.”
While HCR cooperated with the MFCU’s investigation, a statement issued by the company downplayed the size of the settlement by pointing out that it is a large organization with sizeable revenues. The statement said that HCR “looks forward to continuing as a provider in good standing with the Medicaid program.” HCR’s founder and chairperson Louise Woerner could not be reached for comment.

According to former HCR CEO Mark Maxim, the company, which is headquartered at 85 Metro Park in Brighton, New York plans on expanding into 10 North Country and Central New York Regions. Citing a loss of local business due to recent changes to the Medicaid system in the state, Maxim stated that HCR, which employs 450 local workers, would be able to offset losses by expanding into other areas.

Website Resource: HCR to pay state $2.5M to settle Medicaid fraud charges, Rochester Business Journal, Will Astor, January 9, 2014
A.G. Schneiderman Announces $2.5 M Settlement With Rochester Home Health Agency For Defrauding Medicaid

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