Two Home Health Aide Certification School Operators Plead Guilty To Supplying Hundreds Of False Credentials

NEW YORK, NY (August 23, 2007) – Attorney General Andrew Cuomo today announced he secured guilty pleas from the former operators of two “certification mills” that provided false credentials to hundreds of home health aides as part of a widespread and elaborate scheme to defraud Medicaid of millions of dollars.

“The audacity displayed by the operators of these false certification mills is matched only by the severity of the damage they’ve done to the Medicaid system and the risk they've imposed on the patients who count on home health care. We count on these schools to ensure the aides sent into patients’ homes are well-trained and qualified,” Attorney General Cuomo said. “This wholesale fraud is emblematic of the breadth of the problems our investigation is uncovering, and we are aggressively working to root out.”

In the first case, Laurette Escarment, 60, pleaded guilty to Grand Larceny in the 3rd degree, a D felony, for her role in providing hundreds of home health care aides with the fraudulent documents through her Jamaica, Queens-based On Time Home Care Agency. Her operation ran from at least 2003 until November last year, when she was indicted. She faces a maximum penalty of 7 years in prison and is due to be sentenced August 30.

In the second case, Mary Smalls, RN, 75, of Laurelton, NY, pleaded guilty to Grand Larceny in the 4th Degree, an E felony, for issuing hundreds of false certifications through her Brooklyn-based Smalls Training and Counseling School. Her operation ran from at least 2003 until late 2005. She faces a maximum penalty of 4 years in prison and is due to be sentenced September 15.

Escarment and Smalls would provide – for a fee of approximately $300 - $400 – certificates of completion for state-required home health aide training courses. Smalls even went so far as to furnish “students” with the correct answers to the licensure exam, keeping the exams on file as purported proof the students had completed training.

Medicaid requires home health aides – who primarily care for elderly patients, administer medication, and provide services such as catheter care, colostomy care and wound care – to successfully complete a training program licensed by the Department of Health or the State Education Department. All such aides must receive a minimum of 75 hours of training, including sixteen hours of supervised practical training conducted by a Registered Nurse, and must pass an examination. Many of the aides possessing certifications from Smalls and On Time had received no such training, and as a result, Medicaid was billed for services provided by unqualified aides, and Medicaid patients were given care by untrained aides.

Armed with the false credentials provided by Escarment and Smalls, aides would gain employment with licensed home care service agencies, causing Medicaid to be billed for services they provided. However, provided as they were by unlicensed practitioners, the services were not eligible for Medicaid payments. Attorney General Cuomo has extended his investigation to these agencies, at least one of which employed aides whose certifications came from Escarment and Smalls.

Cuomo recently released the names of 14 New York home health care aides, two registered nurses and a Medicaid recipient variously convicted of practicing with false credentials, billing for services they did not provide or receive, providing and billing for care of ineligible recipients, and causing Medicaid to be billed for 24-, and in at least one case, 36-hour workdays. The cases continue to mount as the investigation expands, and more arrests are expected.

“The potential extent of abuses here is staggering,” Cuomo said. “And every day, the investigators and auditors of the Medicaid Fraud Control Unit are uncovering more evidence of corruption reaching all the way to the top of some of these health care agencies. We are working to put an end to it.”

Earlier this week, Cuomo announced he had issued subpoenas and requests for self-disclosure to nearly 60 of New York’s certified home health agencies, which bill Medicaid for services home health aides provide, often through licensed home care service agencies.

Provisions establishing and regulating home health care in New York were set forth in Chapter 895 of the state laws of 1977. The aim was to create a “nursing home without walls,” reducing the costs associated with institutionalization and providing patients a greater level of comfort. Every month, more than 80,000 New Yorkers receive some sort of Medicaid-funded home health services – just over 54,000 of them live in New York City. In 2006, Medicaid spent nearly $1.3 billion on home health care. Because there is no centralized registry for home health aides, an accurate estimate of their numbers cannot be given.

Attorney General Cuomo urged New Yorkers to report cases of suspected fraud to the AG’s Medicaid Fraud Hotline, at 1-866-NYS-FIGHT (697-3444).

The investigation of fraud in the home health care industry, dubbed “Operation: Home Alone,” is ongoing. The case is being prosecuted by Richard Harrow, Director of the New York City Regional Office of the Medicaid Fraud Control Unit, assisted by Special Assistant Attorney General Kiran Heer, under the supervision of Special Deputy Attorney General Heidi Wendel. The investigation was conducted by Senior Special Investigators Michael Casado, Frederick Rondina and Hazel Walters, and Special Investigator Natalie Sotnikova, Associate Special Auditor Investigator Cristina Truta, and Special Auditor Investigator Lisa Close under the supervision of Supervising Special Auditor Investigators Paul Erhart and Thomasina Smith. Deputy Director of MFCU Information Technology Carolyn Pollard also contributed to the case.


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