ROCHESTER — New York Attorney General Eric Schneiderman on Thursday announced a $2.5 million settlement with Rochester–based Home Care of Rochester (HCR), resolving an investigation into false billings.
The organization had billed Medicaid for more than 6,500 hours of services provided by uncertified home-health aides and aides who falsely inflated the hours they worked, Schneiderman’s office said in a news release.
HCR Home Care is the doing-business-as name of L. Woerner, Inc., which has an upstate New York service area that includes Madison and Cortland counties in Central New York.
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The bulk of the company’s fraudulent billing meant that it charged Medicaid for business costs unassociated with patient care, such as advertising, the attorney general’s office said.
Under the agreement, HCR will refund Medicaid more than $2.5 million, plus interest.
“When providers rip off Medicaid for costs unrelated to healthcare, New York’s most vulnerable patients and taxpayers are directly harmed,” Schneiderman said in the news release. “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.”
The investigation, which began after the unit audited HCR’s records, revealed that HCR submitted more than $2.2 million in costs for non-patient care services between 2002 and 2006, Schneiderman’s office said.
Those are services that the Medicaid program does not cover.
The “improper” costs included country club dues for HCR executives, advertising costs, and employee salaries related to marketing activities, according the attorney general’s office.
The company also improperly billed Medicaid for the cost of company vehicles and for interest expense on business loans that investment income didn’t offset.
Medicaid, which certifies HCR as a home-health agency, allows reimbursement only for “necessary” costs directly associated with patient care, the attorney general’s office said.
After the investigation began, HCR disclosed that it improperly charged the program for more than 6,500 hours of work by 23 uncertified home-health care aides. Until the investigation began, the company was unaware the aides weren’t properly trained.
The company also disclosed that it had “unwittingly” submitted false timesheet claims from home-health aides who inflated the hours they worked at Rochester’s The Shire at Culverton adult-care facility, an HCR client, according to the attorney general’s office.
HCR reaction
The organization released a statement late Thursday, providing its comments on the settlement.
HCR Home Care has reached a “mutually satisfactory settlement” with New York following a “routine” audit of its Medicaid-cost reports spanning the years 2002 to 2006, Tim Cook, spokesman for HCR Home Care, said in the statement emailed to The Central New York Business Journal and CNYBJ.com.
“The settlement amount does not represent a significant amount of revenue over the four-year period involved for an agency of HCR’s size,” Cook said.
The company “cooperated fully” with the state’s auditors throughout the “lengthy” process, Cook said.
HCR has also taken additional steps to ensure the accuracy of its cost reports and billings, including investing in technology to “further improve” internal processes and compliance with the Medicaid program’s “complex” rules and regulations, Cook said.
“HCR looks forward to continuing as a provider in good standing with the Medicaid program and to providing patients and their families our nationally recognized, high-quality, home care services,” he added.
Business footprint
In addition to doing business in Cortland and Madison counties, HCR Home Care in October announced plans to expand into Onondaga, Oswego, Cayuga, and Jefferson counties.
HCR Home Care also operates offices in Monroe, Genesee, Orleans, Schoharie, Delaware, and Clinton counties, according to its website.
The health-care organization provides nursing and rehabilitation services, and specialty-care programs, its website says.
Contact Reinhardt at ereinhardt@cnybj.com
Editor’s note: Story updated on Friday, Jan. 10 with HCR Home Care’s comments.
