Attorney General James Stops Illegal Agreement between Home Care Companies to Protect Patients and Caregivers

 

Marks Homecare Agency Inc. and Martin Ganz to Pay $550,000 in Penalties for Unlawful ‘No Poach’ Agreement

New York Attorney General Letitia James today stopped unlawful no poach agreements between Marks Homecare Agency Inc. (Marks Homecare) and another home care company that prevented patients and their caregivers from moving to the provider of their choice. An investigation by the Office of the Attorney General (OAG) found that Martin Ganz, acting on behalf of Marks Homecare, entered into an unlawful agreement with a competitor to not take each other’s existing patients. The OAG found that on several occasions, vulnerable patients were unable to switch to a provider that could have paid their caregivers more. As a result of today’s agreement, Marks Homecare and Martin Ganz cannot enter into any anti-competitive agreements in the future, must pay the state $550,000, and will cooperate with OAG’s ongoing investigations in the home care industry.

“Vulnerable New Yorkers should be free to use the home care provider of their choice,” said Attorney General James. “By refusing to allow patients to switch providers, Marks Homecare created an unhealthy market that limited patients’ options and reduced caregivers’ wages. Today, we are holding Marks Homecare accountable for deceiving patients and restoring fairness to the home care industry to protect patients and caregivers.”

Marks Homecare is a Queens-based fiscal intermediary in the home care industry that administers caregiver payments for patients enrolled in the New York State Consumer Directed Personal Assistance Program (CDPAP). New York’s CDPAP allows patients who require long-term care to hire a family member or a friend as their caregiver. Fiscal intermediaries, such as Marks Homecare, are the entities that handle timesheet processing, payments to a patient’s caregivers, and other administrative functions on behalf of patients. In a competitive market, a patient would choose the fiscal intermediary that pays their chosen caregiver a higher hourly wage and/or a company with better services.

The OAG investigation found that Marks Homecare and Martin Ganz, acting on behalf of Marks Homecare, entered into an unlawful agreement with another fiscal intermediary to not take each other’s existing patients, which prevented their existing patients and their chosen caregivers from moving to the company of their choice. On several occasions, patients tried to switch to Marks Homecare but were rejected because they were patients of their competitor. Marks Homecare and its competitor also exchanged information about the hourly rates they were paying caregivers to reduce competition. Additionally, Marks Homecare and Martin Ganz attempted to enter into another unlawful agreement with a different competing fiscal intermediary.

As a result of today’s agreement, Martin Ganz and Marks Homecare cannot enter into any anticompetitive agreements that restrict options for patients and must administer an antitrust compliance program with a training for its management and executive personnel. Marks Homecare must provide annual reports to OAG on its compliance with this agreement for the next five years. Marks Homecare must pay a $500,000 penalty to the state and Martin Ganz must pay a $50,000 penalty to the state.