Ten home care employees affiliated with various home care agencies in Brooklyn were indicted by the U.S. Department of Justice (“DOJ”) in an alleged conspiracy involving kickbacks being paid to home care aides and patients for services that were never provided. The indictment is available HERE and the U.S. DOJ’s announcement summarizing the allegations is HERE. The kickback payments were allegedly made by various human resources, coordination, recruiters and other office staff of home care agencies. While the complaint does not specifically identify the owners of the agencies, it does state that the management, aides, and patients who were allegedly involved in this scheme were affiliated across two agencies and the agencies collectively employed approximately 3,000 aides. The DOJ, as part of its investigation, obtained a recorded conversation that, according to the complaint, had one of the agency employees explaining to an aide that the aide would split half of her pay with a no-show patient case. It is further alleged that the aides not only received kickbacks from the agencies, but the aides themselves paid agencies’ office employees kickbacks if those office employees referred them no-show cases.
It remains to be seen how these cases will be ultimately resolved. All allegations are simply allegations until proven in a court of law. However, the agency whose employees were indicted will surely face increased scrutiny from MLTCs and may lose contracts. While the DOJ’s indictment is a criminal one against individual actors, the agencies who employed these individual actors will surely be required to refund to the State all monies received for these cases. The DOJ’s investigation was conducted in collaboration with OMIG which will seek, if it has not already, a repayment of all the money paid to the agencies involved. Given the egregious nature of this fraud, it is likely that OMIG will conduct a more wide sweeping audit of the agencies and their billing practices. With the impending LHCSA RFO, allegations such as these will have to be disclosed and revealed in the agencies’ applications to the Department, where it will surely be frowned upon.
The allegations in this case are a stark reminder to agency owners that they must be vigilant about the individual actions of their office staff who deal directly with the patients and the caregivers. Corporate compliance plans should not simply exist on paper. They have to be living and breathing mantras of agencies if they are ever to be effective in avoiding these types of unlawful practices. Moreover, this year’s budget bill increased the requirements for corporate compliance plans and their implementation. Surely, in their OMIG audit, the agencies that are involved in this DOJ investigation will be penalized for having inadequate corporate compliance plans or, at least, not having implemented those plans properly.
If you have any questions about the parameters of the antikickback laws or corporate compliance plan obligations, please do not hesitate to reach out to us.