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AG: Home health agency with designs on Jefferson County to pay $2.5m fraud settlement

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A home health agency that received state approval in October to operate in Jefferson County has agreed to pay $2.5 million to resolve an action brought by the state attorney general over false billings.

Attorney General Eric T. Schneiderman announced a settlement Friday with L. Woerner Inc., Rochester, which does business as Home Care of Rochester (HCR). The attorney general’s investigation determined that HCR billed Medicaid for more than 6,500 hours of services provided by uncertified home health aides and aides who falsely inflated the hours they worked. Mr. Schneiderman said the bulk of the company’s fraudulent billing meant that Medicaid was charged for business costs unassociated with patient care.

“When providers rip off Medicaid for costs unrelated to health care, New York’s most vulnerable patients and taxpayers are harmed,” he said in a statement.

The investigation by the attorney general’s Medicaid Fraud Unit, which began after an audit by the unit of company records, revealed that from 2002 to 2006, HCR submitted more than $2.2 million in costs for non-patient care services, which Medicaid does not cover. The improper business costs included country club dues for HCR executives, advertising expenses and employee salaries related to marketing activities.

The company also improperly billed Medicaid for the cost of company vehicles and for interest expense on business loans that was not offset by investment income, according to the attorney general. Medicaid rules allow only reimbursement for necessary costs directly associated with patient care.

After the investigation began, HCR, which is certified by Medicaid as a home health agency, disclosed that it improperly charged the program for more than 6,500 hours of work by 23 uncertified home health care aides, the attorney general said. Until the investigation began, the company maintained, it was unaware the aides were not properly trained.

The state Public Health and Health Planning Council approved HCR’s application to expand into Jefferson and Oswego counties, among other counties, on Oct. 3.

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