Attorney General James gets nearly $7 million from home health agencies for cheating workers and Medicaid fraud

All American Homecare Agency and Crown of Life Care Submitted False
Claims to
Medicaid and failed to pay millions of dollars in employee salaries

The companies agree to pay $5.4 million to Medicaid and
Crown agrees to return $1.5 million to defrauded employees of their salaries

NEW YORK – New York Attorney General Letitia James announced settlements with two home health agencies for misleading employees about their pay and submitting false Medicaid claims. Under the terms of the agreements, All American Homecare Agency, Inc. (All American) reimbursed $4 million and Crown of Life Care NY LLC (Crown) will donate $1.4 million to the Medicaid program. Crown will also pay more than $1.5 million for distribution to employees who were defrauded of their wages. All American and Crown admitted wrongful conduct and 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 to our most vulnerable, and they must be fairly compensated for their work,” said Attorney General James. “Not only have these companies shamelessly deceived their workers, they have also deceived our state and robbed the communities that need it most. My office will never tolerate fraud of any kind, and we will continue to do everything in our power to ensure that New Yorkers get their fair pay and treatment.

“It is outrageous to cheat home health care aides out of their hard-earned benefits guaranteed by New York law and the Medicaid program,” said United States Attorney for the Eastern District of New York Breon Peace. “These settlements reflect this office’s strong commitment to preventing fraud in government programs and to protecting home health care aides – who perform physically and emotionally taxing work to care for some of our community members who need it. most needed.”

New York’s Equal Pay Act sets the minimum wages and benefits that state-licensed home care service agencies (LHCSAs) are required to pay to staff who provide home care and support services. personal care for Medicaid recipients. Under the law, workers are currently entitled to a base wage of $15.00 per hour that agencies must pay, as well as $4.09 per hour overtime in New York and $3.22 in Nassau, Suffolk and Westchester counties. Reimbursement by the Medicaid program for services rendered to Medicaid beneficiaries is conditional upon meeting these salary and benefits requirements.

The joint investigation by the Office of the Attorney General (OAG) and EDNY found that All American and Crown failed to pay their home health aides the required wages and benefits owed to them under the wage parity; unlawfully requested payment from Medicaid and received money for care provided by underpaid aides; and falsely certified compliance with the pay equity law.

Between April 2014 and December 2018, Crown underpaid its home health aides by more than $1.5 million, which will now be fully reimbursed to current and former employees affected by Crown’s pay equity issues. Of that amount, $1,167,050 will be paid to OAG for distribution to affected home health aides and $411,000 will be paid as paid time off for current aides who owe back wages. Crown will also contribute $1.4 million to the Medicaid program, of which $840,000 will go to the state and the remaining $560,000 will go to the federal government. Also as part of its agreement with the OAG Labor Office, Crown is required to review company policies and procedures; train staff on updated policies subject to OAG approval; and report regularly on staff salaries and policy implementation to the OAG for six years. If the Crown breaches these terms or does not properly compensate its aides, OAG has the power to bring a civil action against the agency and seek $15,000 in damages for breach of its legal obligations.

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

The OAG’s Office of Labor and the Medicaid Fraud Control Unit (MFCU), in conjunction with EDNY, began these investigations after whistleblowers filed a lawsuit under the who tam provisions of the New York False Claims Act, as well as the federal False Claims Act, in the United States 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 participate in any recovery. The whistleblowers’ complaint alleged that All American and Crown failed to pay their home health aides the amount statutorily required under pay equity. The state has since filed a Notice of Intervention against both companies with those settlement agreements. It is also the largest settlement by the Bureau of Labor to date for violations of the Equal Pay Act and is a vital victory in Attorney General James’ ongoing efforts to protect the rights and wages of New Yorkers.

“Thank you to Attorney General James and her staff, who investigated and made sure things were right and justice was done,” said Carmen Perez Collado, former employee of Crown of Life Care. “I am grateful that our hard work caring for people at home is valued and recognized.”

“Thank you, Attorney General Letitia James, for considering our work and investigating the company as there have been irregularities,” said Susana, home help.

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

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 assistance from MFCU’s Civil Law Enforcement Division Chief, Alee N. Scott. The cases were investigated by Senior Investigator Verifier Milan Shah and Investigator-Verifier Khristian Diaz, with assistance from Regional Chief Auditor Stacey Millis. Additional investigative support was provided by Detective Aristotle Psathas, with assistance from MFCU Deputy Chief Executive Officer Kenneth Morgan. MTCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney. The Criminal Justice Division is headed by Chief Deputy Attorney General José Maldonado.

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