Visiting Nurse Service of New York and its managed long-term care plan, VNS Choice, will pay a total of $4,392,150 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.
Prosecutors said that once VNS disenrolled the members, it did not repay Medicaid for the funds it had improperly received. According to the government, 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.
New York State will receive $2.63 million as part of the settlement agreement.
Pursuant to Medicaid regulations, managed long term care plans (“MLTCs”) such as 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 to $4,200 from Medicaid for providing services to MLTC members.
VNS's contract with New York required it to disenroll MLTC members under certain circumstances, including when a member no longer resided in the service area, had been absent from the service area for a specified number of consecutive days, was hospitalized for 45 consecutive days or longer, or was no longer eligible for the MLTC plan.
The settlements resolved allegations that although VNS ultimately disenrolled the 365 members, it never reimbursed Medicaid for the monthly capitation payments improperly received for these members. According to prosecutors, 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. Despite this knowledge, prosecutors said, VNS kept the Medicaid capitation payments for the members who should have been disenrolled, often as many as four and five months earlier.
This settlement is the second reached with VNS regarding its MLTC plan, VNS Choice. In November 2014, VNS paid nearly $35 million to settle allegations relating to the allegedly improper use of social adult day care centers to enroll members in VNS Choice.
This new settlement came after 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 share of the settlement proceeds from New York after full payment by the defendants.
The case was 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, No. 13 Civ. 4261 (S.D.N.Y.).
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].