Visiting Nurse Service of New York agrees to pay $57 million in landmark false-claims settlement

Visiting Nurse Service of New York has agreed to pay $57 million to settle a whistleblower lawsuit that alleged it billed government insurers for home care visits that it didn’t provide.

The not-for-profit did not admit guilt as part of the settlement, and its payments will be split between the federal government, the state and the whistleblower, a former VNSNY employee.

The settlement is the second-largest ever paid by a home care agency and the largest paid by a not-for-profit home care agency, according to attorneys representing the plaintiff.

“For more than five years, we have been forced to defend ourselves against a lawsuit based on allegations that are simply untrue: We did not bill for visits we didn’t deliver, nor did we cause harm to our patients,” said Kerry Parker, executive vice president, general counsel and chief risk officer at VNSNY. “By resolving these claims through the present, we can put this distraction behind us and move forward.”

The lawsuit dates to July 2014, when Edward Lacey, a former vice president at VNSNY, filed a complaint in federal court in Manhattan that accused the agency of submitting false claims for visits that it did not deliver. The U.S. and New York declined to intervene in the case.

Lacey said VNSNY, over at least 10 years starting in 2004, had accepted more patients than it had the capacity to treat and did not disclose to referring physicians that it was unable to provide the number and types of visits that had been outlined in patients’ care plans. It also failed to notify referring physicians of any intent to modify the plans. In one example cited in the complaint, a patient with lupus who had a lower limb amputation was prescribed 27 rehabilitation visits and 38 nursing visits for a 60-day period but received no rehab visits and five nursing visits. VNSNY was paid $3,537 for the episode of care.

The federal government is due to receive about $50.2 million, and New York’s Medicaid program will receive $6.8 million. Whistleblowers are entitled to 25% to 30% of the government’s share, which will net Lacey in the range of $14 million to $17 million. He also will receive money for attorney’s fees from VNSNY.

The National Association for Home Care and Hospice issued a statement in support of VNSNY, noting Medicare does not require strict adherence to plans of care because of circumstances outside workers’ control, such as patients’ refusal of care.

Marlene Koury, a partner at Constantine Cannon who represented Lacey, said association’s stance suggests the practice of home health agencies adjusting plans of care without notifying physicians is widespread.

“It’s the first case of its kind,” Koury said. “I think it’s going to send shock waves through the home health care industry.”

Visiting Nurse Service of New York agrees to pay $57 million in landmark false-claims settlement” originally appeared in Crain’s New York Business.


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