Attorney General James Secures More Than $7.6 Million from Health Insurer for Using Banned Medicaid Provider

 

Fidelis Contracted with Social Worker Ward Halverson Despite His Criminal Conviction, License Suspension, and Ban from the Medicaid Program

New York Attorney General Letitia James announced a settlement with Fidelis Care (Fidelis) for causing vulnerable Medicaid patients in Central New York to receive treatment at a company owned by a social worker who had previously lost his license after being convicted of a crime. Fidelis billed Medicaid for services provided by Cornerstone Herkimer, LLC (“Cornerstone”), even though the company’s sole owner and director, Licensed Clinical Social Worker Ward Halverson, had been excluded from the Medicaid Program. Halverson was banned from being a Medicaid provider in 2017 after being convicted of a misdemeanor for firing a BB gun at a child. Under the settlement, Fidelis will pay back more than $7.6 million in reimbursements to the Medicaid program. Fidelis also agreed to perform systematic status checks of those it contracts with against federal and state lists of providers excluded from Medicaid, and terminate any prohibited relationships identified during its reviews.  

“New Yorkers should be able to trust that the doctors and health care providers their insurers use are properly licensed and will treat them responsibly,” said Attorney General James. “When companies fail to do their due diligence, patients are at risk of being treated by providers who may be unlicensed or unsafe. This settlement sends a clear message that insurers will be held accountable if they do not ensure those in their networks are legally allowed to treat vulnerable Medicaid patients.”

Health care providers can become “excluded” from the Medicaid Program as a result of a fraud or criminal conviction. Managed Care Organizations like Fidelis must terminate their relationships with any excluded provider, to ensure that vulnerable patients are not at risk of being sent to unlicensed, fraudulent, or unsafe providers. State and federal laws, as well as Fidelis’ contract with New York state, require Fidelis to conduct routine checks of exclusion lists to identify any of these prohibited relationships and terminate them.  

Halverson was a Licensed Clinical Social Worker who initially contracted with Fidelis to provide Medicaid-reimbursed services in 2013. In 2014, Halverson pleaded guilty and was convicted of a misdemeanor for Attempted Endangering the Welfare of a Child, and on January 10, 2017, Halverson’s license was suspended for 12 months by the New York State Office of Professional Discipline. In May 2017, he was excluded from the Medicaid program. However, from February 2019 to July 2021, Fidelis continued to pay Halverson’s company for services, despite knowing that he was an excluded provider. 

As a result of the Office of the Attorney General’s (OAG) action, Fidelis must repay the state Medicaid program $7,681,796.44. Fidelis will also have to determine the identity and exclusion status for all of its participating providers, subcontractors, and anyone with an ownership or managing role as a participating provider or subcontractor. Fidelis is then required to terminate its provider agreements with any excluded person and their businesses.  

This is the latest action that Attorney General James has taken to protect New Yorkers from dangerous and fraudulent health care providers. In March 2024, Attorney General James secured $8.6 million and significant reforms to the Fulton Commons nursing home after repeated financial fraud and resident mistreatment. In November 2023, Attorney General James announced the guilty verdict of a New York doctor who ran a kickback scheme that defrauded Medicaid and subjected patients to invasive procedures they did not need. In October 2023, Attorney General James sued Fresenius Vascular Care for subjecting vulnerable patients to unnecessary surgeries. In September 2023, Attorney General James secured more than $3 million from a health care company that ran an illegal kickback scheme. In February 2023, Attorney General James secured over $7.1 million from a former nursing home for years of fraud and resident neglect. In September 2021, Attorney General James announced the indictment of a Medicaid fraud ringleader who endangered hundreds of patients, the majority of whom were HIV patients, which resulted in the ringleader and his accomplices being excluded from the Medicaid program. 

Reporting Medicaid Provider Fraud: MFCU defends the public by addressing Medicaid provider fraud and protecting nursing home residents from abuse and neglect. If an individual believes they have information about Medicaid provider fraud or about an incident of abuse or neglect of a nursing home resident, they can file a confidential complaint online or call the MFCU hotline at (800) 771-7755. If the situation is an emergency, please call 911.

MFCU’s total funding for federal fiscal year 2024 is $68,997,928. Of that total, 75 percent, or $51,748,448, is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent, totaling $17,249,480 for FY 2024, is funded by New York State.