NYC Settles False Claims Act Suit on Medicaid Personal Care - Selfhelp and 41 Non-Profit Organizations Demand Feds Use $70 Million Fine to Ensure Access to Home and Community-Based Services

On November 3, 2011, Selfhelp, NYLPI, the Legal Aid Society and other organizations wrote to CMS and the United States Attorney, protesting the settlement of the False Claims Act case against NYC alleging fraud in its Medicaid Personal Care program, and demanding that the settlement money be used to protect access to vital Medicaid home care services in NYC.  

The letter, posted here, states, "We are already seeing that this settlement will exacerbate the chilling effect that this prosecution has already had on the authorization of these vital services, leading to more erroneous denials of care and a further skewing of the system towards one in which denials or reductions of services are the default position of an agency fearful of sanctions and audits ... The settlement payment should be used to monitor denials of initial applications and re-authorizations of services. Further, resources are needed to provide needy consumers with the case management and legal services they need to navigate the ever-tightening procedures for obtaining services – to ensure that vulnerable people do not suffer wrongful disruption of services, or unnecessary institutionalization, in violation of Olmstead

The advocates' letter was reported in the New York Times on November 4th -- Settlement Prompts Fear About Cuts to Medicaid, New York Times, Nov. 4, 2011  

On October 31, 2011, New York City reached a settlement with the U.S. Department of Justice and with the "Relator," Dr. Gabriel Feldman,  in the lawsuit brought under the False Claims Act, claiming that the NYC Medicaid program had approved Medicaid 24-hour personal care services in violation of certain legal procedures. Selfhelp, New York Lawyers for the Public Interest, and many other organizations have opposed this lawsuit vigorously since it was filed in January 2011, first demanding in a letter -- posted herethat the U.S. Attorney withdraw it, and then filing an amicus "friend of the court" brief, which can be downloaded here -- arguing that the City's approval of 24-hour care services is required by the Olmstead case and the Americans with Disabilities Act to enable people with disabilities to live in the community.  The lawsuit is based on paperwork technical mistakes made in the City's recordkeeping -- and never claims that the people who received 24-hour services were not truly disabled and in need of long-term care.  

In the Settlement, the City will pay the United States $70 million dollars, out of which $14.7 million is paid to the so-called whistleblower, Dr. Gabriel Feldman, a physician employed as "Local Medical Director" under contract with HRA to review requests for personal care. Advocates have had many clients who had to request fair hearings after Dr. Feldman recommended that they be denied any home care -- and should be in nursing homes, or after he denied adequate hours of care.  The State has repeatedly reversed HRA denials of home care based on his recommendations.   

In addition to paying $70 million, New York City agreed to the following terms in the Settlement:  

Par. 3. The City acknowledges that:

a. 18 N.Y.C.R.R. § 505.14, the state Medicaid regulation for the PCS program ("PCS Regulation"), generally requires HRA to base its authorization of 24-hour PCS care on a physician's, nurse's, and social assessment, as well as, in certain cases, an independent medical review.

b. From 2000 to late 2010, HRA reauthorized 24-hour PCS care for certain patients without having physically obtained certain physician's, nurse's, andlor social assessments, andlor having obtained independent medical reviews.

c. Since the United States commenced its investigation in this matter, HRA has adopted additional policies and procedures designed to ensure full compliance with the PCS Regulation, including, specifically, to obtain independent medical reviews in connection with reauthorizing 24-hour split-shift care. The settlement agreement, including the settlement amount, is fair, reasonable, and adequate under the facts and circumstances.

ADVOCACY ALERT -- As a result of the tightened procedures, more applications are being denied, and more people are threatened with wrongful discontinuance of home care services. 

Fair hearings must be requested, and the rules and regulations for authorizing 24-hour care have not changed.  See this article.   In particular, be alert for attempts to reduce services from the amounts previously authorized.  These reductions are subject to the safeguards established in Mayer v. Wing, since incorporated into state regulation:

No district may reduce or terminate personal care services without meeting its burden of proof to show a change in the individual's medical condition or circumstances justifies the reduction, or that a mistake was made in the original authorization, and certain other limited reasons. 18 NYCRR 505.14(b)(5)(c). (page 8 of link)

Read about the settlement in the press:

For past history of the False Claims Act lawsuit,  to download complaint and other pleadings, and to see earlier press coverage, click here.  

Posted by Selfhelp Community Services, Inc.  For information contact

04 Nov, 2011
NYC Settles False Claims Act Suit on Medicaid Personal Care - Selfhelp and 41 Non-Profit Organizations Demand Feds Use $70 Million Fine to Ensure Access to Home and Community-Based Services