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Attorney General James secures nearly $7 Million from home health agencies for cheating workers and medical fraud

New York Attorney General Letitia James announced agreements with two home health agencies for cheating employees out of wages and submitting false Medicaid claims. Under the terms of the agreements, All American Homecare Agency, Inc. (All American) repaid $4 million and Crown of Life Care NY LLC (Crown) will return $1.4 million to the Medicaid program. Crown will also pay more than $1.5 million for distribution to employees that were cheated out of their wages. Both All American and Crown have admitted to their wrongful conduct and have simultaneously entered into settlement agreements with the U.S. Attorney’s Office for the Eastern District of New York (EDNY) to resolve their Medicaid fraud liability.

“Home health aides provide critical care for our most vulnerable, and they must be fairly compensated for their work,” said Attorney General James. “Not only did these companies shamelessly cheat their workers, they also cheated our state and stole from communities that need it most. My office will never tolerate fraud of any kind, and we will continue to do everything we can to ensure that New Yorkers get their fair pay and treatment.”

“It is outrageous to cheat home health aides of their hard-earned benefits guaranteed under New York law and the Medicaid program,” said U.S. Attorney for the Eastern District of New York Breon Peace. “These settlements reflect this office’s firm commitment to preventing fraud in government programs and protecting home health aides — who perform physically and emotionally taxing work in caring for some of the members of our community most in need.”

The New York Wage Parity Act sets wage and benefit minimums that state-licensed home care services agencies (LHCSAs) are required to pay staff who perform home health aide and personal care services to Medicaid recipients. Under the law, workers are currently entitled to a base wage of $15.00 per hour that agencies must pay, and an additional $4.09 per hour in New York City and $3.22 in Nassau, Suffolk, and Westchester counties. Reimbursement by the Medicaid program for services rendered to Medicaid recipients is conditioned upon compliance with these wage and benefit requirements.

The joint investigation by the Office of the Attorney General (OAG) and EDNY found that both All American and Crown failed to pay their home health aides the required wages and benefits owed to them pursuant to the Wage Parity Act; unlawfully sought payment from Medicaid and received money for care performed by aides who were underpaid; and falsely certified compliance with the Wage Parity Act.

Between April 2014 and December 2018, Crown underpaid its home care aides by more than $1.5 million, all of which will now be repaid to current and former employees impacted by Crown’s wage parity issues. Of that amount, $1,167,050 will be paid to OAG for distribution to the impacted home health aides and $411,000 will be paid in the form of paid time off for current aides who are owed back wages. Crown will also pay $1.4 million to the Medicaid program, of which $840,000 will be paid to the state and the remaining $560,000 will be paid to the federal government. Also as part of its agreement with OAG’s Labor Bureau, Crown is required to revise company policies and procedures; train personnel on updated policies subject to OAG’s approval; and regularly report staff wages and policy implementations to OAG for six years. If Crown fails to comply with these terms or properly compensate its aides, OAG has the authority to bring a civil action against the agency and demand $15,000 in liquidated damages for violating its legal obligations.

Although All American provided certain benefits to its staff, it did not timely pay the full $4.09 per hour required by law. During the investigation, All American remunerated its impacted home health aides by depositing money into current employees’ 401(k) accounts and issuing checks for back pay to former employees. All American has now repaid $4 million to Medicaid to resolve its liability for submitting false claims. Under the terms of the agreements, All American will also self-report to OAG for a two-year period to ensure continued compliance with the Wage Parity Act.

The OAG’s Labor Bureau and Medicaid Fraud Control Unit (MFCU), in conjunction with EDNY, commenced these investigations after whistleblowers filed a complaint under the qui tam provisions of the New York False Claims Act, as well as the federal False Claims Act, in the U.S. District Court for the Eastern District of New York. The New York False Claims Act allows individuals to file actions on behalf of the government and share in any recovery. The whistleblowers’ complaint alleged that All American and Crown failed to pay their home health aides the statutorily required amount pursuant to Wage Parity. The state has since filed a notice of intervention against both companies with these settlement agreements. This is also the Labor Bureau’s largest settlement to date for violations of the Wage Parity Act and is a vital victory in Attorney General James’ ongoing efforts to protecting New Yorkers’ rights and wages.

“Thank you to Attorney General James and her staff, who investigated and made sure that things are fair and that justice is served,” said Carmen Perez Collado, a former Crown of Life Care worker. “I am grateful that our hard work of caring for individuals at home is valued and recognized.”

“Thank you, Attorney General Letitia James, for taking into account our work and for investigating the company, as there were some irregularities,” said Susana, a home health aide.

MFCU’s total funding for federal fiscal year (FY) 2022 is $59,918,216. Of that total, 75 percent — or $44,938,664 — is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent of the approved grant — totaling $14,979,552 for FY 2022 — is funded by New York state. Through its recoveries in law enforcement actions, MFCU regularly returns more to the state than it receives in state funding.

The investigations and settlements were a coordinated effort between OAG and the U.S. Attorney’s Office for the Eastern District of New York.

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Both the All American and Crown investigations were handled for MFCU by Special Assistant Attorneys General Jill D. Brenner, Ting Ting Tam, and Hillary Gray Chapman, with the assistance of MFCU Civil Enforcement Division Chief Alee N. Scott. The cases were investigated by Principal Auditor Investigator Milan Shah and Auditor-Investigator Khristian Diaz, with the assistance of Regional Chief Auditor Stacey Millis. Additional investigative support was provided by Detective Aristotle Psathas, with the assistance of MFCU Deputy Chief Executive Officer Kenneth Morgan. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney. The Division for Criminal Justice is led by Chief Deputy Attorney General José Maldonado.

The Crown investigation was handled in the Labor Bureau by Assistant Attorneys General Anielka Sanchez Godinez and Kristen Ferguson, with the assistance of Civil Enforcement Section Chief Fiona J. Kaye and Former Civil Enforcement Section Chief Ming-Qi Chu, under the supervision of Deputy Bureau Chief Julie Ulmet and Labor Bureau Chief Karen Cacace. Additional Assistance was provided by Data Scientist Chansoo Song and Deputy Director Megan Thorsfeldt of the Research and Analytics Department. The Labor Bureau is a part of the Division for Social Justice and is led by Chief Deputy Attorney General Meagan Faux. Both the Division for Criminal Justice and the Division for Social Justice are overseen by First Deputy Attorney General Jennifer Levy.

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