VNS Choice Improperly Billed Medicaid, Agrees To Pay $4.4 Million To Settle Reverse False Claims Act Allegations In Whistleblower Case
New York State Will Receive $2.63 Million
Attorney General Eric T. Schneiderman and Acting United States Attorney Joon H. Kim today announced that Visiting Nurse Service of New York and its Managed Long-Term Care Plan, VNS Choice, will pay a total of $4,392,150.00 to resolve allegations that the plan improperly obtained public funds and knowingly retained over $1.6 million in Medicaid overpayments. Under the settlement, the service provider admitted that between January 1, 2011 and March 31, 2015 it failed to identify and disenroll 365 VNS Choice members in a timely manner and consequently continued receiving payment for care it did not provide. Once VNS disenrolled the members, it did not repay Medicaid for the funds it had improperly received. By knowingly retaining overpayments for many of these members for more than 60 days, the entities involved—Visiting Nurse Service of New York, VNS Choice, and VNS Choice Community Care (collectively, “VNS”)—violated both the federal and state false claim acts. As a result, New York State will receive $2.63 million as part of the settlement agreement.
“Blatantly retaining and failing to repay Medicaid overpayments undermines the system on which so many vulnerable New Yorkers rely,” said Attorney General Schneiderman. “The law makes clear that overpayments must be repaid in a timely manner – and we’ll hold providers to the law.”
Pursuant to Medicaid regulations, Managed Long Term Care plans (“MLTCs”), like VNS Choice, receive monthly capitation payments for each member enrolled in the MLTC plan, in exchange for arranging and providing certain community-based long-term care services, such as care management, skilled nursing services, physical therapy, speech therapy, occupational therapy, and preventive services for the member. From January 2011 to March 2015, VNS received monthly capitation payments between $3,800-4,200 from Medicaid for providing services to MLTC members.
However, VNS’s contract with the State required it to disenroll MLTC members under certain circumstances—including when a member no longer resides in the service area, has been absent from the service area for a specified number of consecutive days, is hospitalized for 45 consecutive days or longer, or is no longer eligible for the MLTC plan.
The settlements, unsealed today in federal court, resolve allegations that although VNS ultimately — albeit belatedly — disenrolled the 365 members, it never reimbursed Medicaid for the monthly capitation payments improperly received for these members. During the period in question, VNS was aware that many of the members should have been disenrolled earlier and that it was not entitled to the recent capitation payments. However, despite this knowledge, VNS kept the Medicaid capitation payments for the members who should have been disenrolled, often as many as four and five months earlier.
Today’s settlement is the second reached with VNS regarding its MLTC plan, VNS Choice. In November 2014, the court unsealed settlement agreements by the Attorney General and the U.S. Attorney’s Office with VNS for nearly $35 million to settle allegations relating to the improper use of social adult day care centers to enroll members in VNS Choice.
This investigation was initiated after a whistleblower filed a lawsuit under the qui tam provisions of the federal and New York False Claims Acts, which allow private persons, known as “relators,” to file civil actions on behalf of the government and share in any recovery. The relator in this case will receive from the State a share of the settlement proceeds after full payment by the defendants.
The investigation and settlement were the result of a coordinated effort between the U.S. Attorney’s Office for the Southern District of New York, and the New York State Attorney General’s Office. Attorney General Schneiderman would like to the Office of the New York State Medicaid Inspector General for its assistance in the matter.
The case is captioned United States and the State of New York, ex rel. David Heisler v. VNS Choice, VNS Choice Community Care, and Visiting Nurse Service of New York, and is docketed with the U.S. District Court for the Southern District of New York under Civil Action No. 13 Civ. 4261 (Abrams, J.)
