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A.G. Schneiderman Announces $10.3 Million Joint State-Federal Settlement With CenterLight Over False Medicaid Billing

CenterLight Knowingly Submitted Billing for Managed Long-Term Care Program Services That Were Never Provided, Then Failed to Repay Medicaid for Falsely-Obtained Payments

New York’s Medicaid Program to Recover $6.36 Million in Restitution and Penalties

Attorney General Eric T. Schneiderman recently announced a joint state-federal settlement with CenterLight Health System, Inc. and CenterLight Healthcare, Inc. (together, “CenterLight”) over false Medicaid billing. CenterLight will pay $10.36 million to settle state and federal allegations that its former managed long-term care plan (“CenterLight MLTCP”) submitted fraudulent requests to New York’s Medicaid program for monthly premiums and failed to repay Medicaid for falsely-obtained payments, violating New York and federal False Claims Acts. New York’s Medicaid program will receive $6.36 million in restitution and penalties from the total settlement payment.

“When a care provider submits phony bills to Medicaid, they rip off New Yorkers and undermine the integrity of our Medicaid system,” said Attorney General Schneiderman. “Today’s settlement should serve as another reminder that we will hold accountable those who seek to game the system for their own benefit.”

The settlement agreement resolves New York State and federal allegations that CenterLight Healthcare:

(a) submitted false claims for monthly capitation payments for 186 CenterLight MLTCP members who lived in adult homes and who, for at least some portion of their enrollment in the CenterLight MLTCP, did not receive community-based long-term care services as required by contract and therefore should have been dis-enrolled; and

(b) knowingly failed to repay Medicaid for monthly capitation payments that CenterLight Healthcare received for many of the 186 Adult Home MLTCP Members after it became aware that the members should have been dis-enrolled earlier, meaning that CenterLight Healthcare was not entitled to those payments.

Click here to view a copy of the settlement agreement.

Medicaid is a jointly-funded state and federal program that provides health care to needy individuals. Managed Long Term Care plans (“MLTCs”) receive monthly capitation payments from Medicaid – similar to insurance premiums – for each member enrolled in the MLTC plan, in exchange for arranging and providing certain community-based long-term care services (“CBLTC”), such as skilled nursing services in the home, therapies in the home, home health aide services, personal care services in the home, and adult day health care. To be eligible for enrollment into an MLTC plan, a Medicaid beneficiary must, among other things, be assessed as needing CBLTC services for more than 120 days from the date of enrollment. CenterLight Healthcare contracted with licensed home care services agencies to provide skilled nursing and home health aide services to CenterLight MLTCP members who resided in adult homes, including the 186 Adult Home MLTCP members at issue in the case.

In the settlement, CenterLight admitted that from April 2012 to September 2015, the 186 Adult Home MLTCP members did not receive the required CBLTC services for certain enrollment periods, and that for a number of individuals there was no record that they received CBLTC services for most of their period of enrollment. CenterLight Healthcare also admitted that it failed to timely disenroll the 186 Adult Home MLTCP members, even though they were no longer eligible for MLTCP services. CenterLight Healthcare failed to repay Medicaid for the monthly payments that it knew it had improperly received for those members. During that time, the payments that CenterLight Healthcare received from Medicaid for providing services to MLTC members were generally $3,800 to $4,200 per member per month.

This is the second settlement reached with CenterLight regarding operation of the CenterLight MLTCP. In January 2016, the court unsealed settlement agreements by the New York Attorney General and the U.S. Attorney’s Office with CenterLight for nearly $47 million to settle allegations relating to the use of social adult day care centers to enroll members in the CenterLight MLTC Plan. A year later, on or about January 31, 2017, CenterLight sold the CenterLight MLTC Plan to another provider.

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 a portion of the settlement proceeds after full payment by CenterLight. The investigation and settlement were coordinated between the U.S. Attorney’s Office for the Southern District of New York and the New York State Attorney General’s Office.

New York State was represented by Special Assistant Attorney General Alee N. Scott, with the assistance of MFCU Civil Enforcement Division Chief Carolyn T. Ellis. The audit analysis was led by Senior Auditor-Investigator Svetlana Volchyok. Investigative support was provided by Auditor-Investigator Emily Brissette, Computer Programing Analyst Nicholas Furnari, and Information Processing Specialist Charles Martellaro.

The Medicaid Fraud Control Unit is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney. The Division of Criminal Justice is led by Executive Deputy Attorney General Margaret Garnett.