A.G. Schneiderman Announces $47 Million Settlement With Centerlight Healthcare For Fraudulently Using Social Day Care Centers To Enroll Ineligible Members

Centerlight Healthcare’s Select Medicaid Managed Long-Term Care Plan Improperly Billed Medicaid; NYS Medicaid Recovers $28 Million

Schneiderman: We Won’t Tolerate Companies That Seek To Exploit The System For Profit

NEW YORK – Attorney General Eric T. Schneiderman today announced a $47 million settlement with CenterLight Healthcare and CenterLight Health System, resolving allegations that CenterLight Healthcare’s Select Medicaid Managed Long Term Care Plan (“MLTCP”) fraudulently billed Medicaid for services they did not provide to more than 1,200 Medicaid recipients.  Under the settlement, CenterLight Healthcare admitted that it enrolled Medicaid beneficiaries who were referred by social adult day care centers even though the beneficiaries were not eligible to receive managed long-term care under the plan, and that the centers were providing services that did not qualify for reimbursement under New York State Department of Health standards, or CenterLight’s contract with DOH.  CenterLight receives over $3,000 a month per member from New York’s Medicaid program as part of its MLTCP. Under the settlement, New York’s Medicaid program will receive $28,050,652.04 and the United States will receive $18,700,434.70.  The U.S. Department of Justice’s Southern District of New York reached a parallel agreement with CenterLight.

“It’s simple: CenterLight Health Care did not play by the rules,” Attorney General Schneiderman said. “We won’t tolerate companies that seek to exploit the system for profit. My office will continue to be vigilant in protecting Medicaid against fraud.”

In addition to its payment of the $47 million under the settlement, CenterLight is entering into two-year agreement with an independent compliance monitor and the Attorney General’s Medicaid Fraud Control Unit.  That agreement requires CenterLight to comply with all terms of its MLTCP contract and DOH policies, and monitor and revise compliance policies if necessary.

The settlement arose out of an investigation initiated by the Attorney General’s Medicaid Fraud Control Unit and the New York State Office of the Medicaid Inspector General. It also resolved certain allegations in a whistleblower case filed in the United States District Court for the Southern District of New York, as well as certain self-disclosures made by CenterLight.

CenterLight Healthcare’s Select program is a Managed Long-Term Care Plan that has contracted with the New York State Department of Health to provide long-term community-based health care for members who are able to remain in their homes without jeopardy to their health or safety and are expected to need more than 120 days of in-home services, including nursing, therapy, home health service and personal care service. CenterLight admitted it billed Medicaid for services provided to 1,241 recipients who did not qualify for these services.

As part of the settlement, CenterLight also admitted that:

  • It enrolled Medicaid beneficiaries who were referred by social adult day care centers or who received services from them, even though they were not eligible to receive managed long-term care under the plan;
  • CenterLight used the day care centers to provide community-based MLTCP personal care services that did not qualify as personal care services under CenterLight’s Select plan.

This is the second settlement from the Attorney General’s Office involving a managed long-term care plan in New York, based on allegations that the managed long-term care plan enrolled members through social adult day care centers who were ineligible.  In October 2014, the Attorney General announced a $37 million settlement with VNS Choice, Visiting Nurse Service of New York, and VNS Choice Community Care regarding similar allegation related to its MLTCP.

The Attorney General thanks New York Medicaid Inspector General Dennis Rosen for the work of his office on this matter.  The Attorney General also thanks New York State Medicaid Director Jason A. Helgerson and his staff for their assistance and the United States Attorney’s Office for the Southern District of New York for its assistance in the investigation.   A whistle-blower, David Heisler, provided valuable information through a “qui tam” action filed under the New York and federal False Claims Acts, and will receive an award for his contribution to the investigation.

The investigation was principally conducted by Associate Special Auditor Investigator Svetlana Volchyok and Associate Special Auditor Investigator Milan Shah, Senior Investigator Wayne Rivers, and Data Analyst Nicholas Furnari.

The case is being handled by Senior Counsel Carolyn T. Ellis and Special Assistant Attorney Alee N. Scott of the Medicaid Fraud Control Unit Civil Enforcement Division.  The Medicaid Fraud Control Unit is led by Acting Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney.  The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

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