This week, New York Attorney General Letitia James and U.S. Attorney for the Eastern District of New York Breon Peace announced a $17.25 million settlement had been reached with two Brooklyn-based home care agencies for allegedly defrauding Medicaid and underpaying thousands of workers.
Specifically, Edison Home Health Care of New York and Preferred Home Healthcare of New York allegedly failed to pay full wages and benefits to over 25,000 workers, according to the New York State Attorney General’s office.
The two agencies and their former operators will pay $7.5 million out to the over 25,000 workers. They will also pay $9.75 million back to Medicaid. It represents the largest wage parity settlement ever secured by the Office of the Attorney General and the Eastern District of New York.
Help at Home acquired both Edison Home Health Care and Preferred Home Healthcare in 2022, but a spokesperson for the company told Home Health Care News that the violations occurred prior to the acquisition.
“Home health aides provide crucial care to our most vulnerable neighbors and loved ones, and they deserve to be paid for their hard work,” James said in a statement. “Edison and Preferred cheated employees out of years of pay and cheated New York taxpayers by defrauding Medicaid for their own benefit. This is a tremendous victory for our ongoing efforts to protect hardworking New Yorkers’ rightfully earned wages.”
The New York Wage Parity Act, which was established in 2012, “was created to ensure home health aides receive fair compensation and benefits for their hard work,” a press release on the settlement read.
The investigation found that the two agencies failed to pay workers the full benefits they were owed under the Wage Parity Act, instead using those funds to purchase medical “stop loss” insurance, “which is a type of insurance that acts as a safety net for employers that are paying for their employees’ medical claims.”
What’s more, “individuals and entities” related to the two agencies received millions of dollars in dividend payments from that insurance, which “effectively served as a means of siphoning away funds intended for employees.”
“Edison and Preferred then continued to seek and receive payments from Medicaid for care performed by home health aides, while falsely representing that they were in compliance with the Wage Parity Act,” the release read.
As part of the settlement, Edison Home Health Care and Preferred Home Healthcare will revise company policies and procedures. They will also “regularly report staff wages and policy implementations” to the attorney general’s office for three years.
If the agencies fall out of compliance, the attorney general has the authority to bring further civil action against them.
Of the $9.75 million that will be paid out to Medicaid, $5.85 million will go to New York state. The other $3.9 million will go to the federal government.
“Home health aides work long hours at difficult, often thankless tasks to ensure that the vulnerable individuals who they provide services to are properly cared for,” Peace said in a statement. “These aides deserve the hard-earned benefits guaranteed to them under the law and my office will ensure that they are accurately compensated.”
In acquiring Edison Home Health Care and Preferred Home Healthcare, Help at Home made an entrance into New York for the first time.
The acquisitions added 10,500 new clients and 12,000 new employees to the company’s portfolio.
“As the leading provider of high-quality, Medicaid home- and community-based services, Help at Home has a 50-year history providing high quality, in-home personal care services in the communities we serve,” Help at Home told Home Health Care News in a statement. “The matter outlined in the agreements took place prior to the 2022 acquisition of Preferred Home Care of NY and Edison Home Health Care. We approached these matters with the utmost seriousness, implementing new rigorous protocols and benefit compliance processes, ensuring the companies met and continue to meet Help at Home’s best-in-class standards. We remain committed to our deep-rooted ‘caring for the caregiver’ culture and providing person-centered care that enables our clients to live as independently as possible in their own homes.”
Based in Chicago, Help at Home provides home- and community-based services (HCBS) to over 70,000 clients monthly across 11 states and more than 200 locations.
Companies featured in this article:
Edison Home Health Care, Help At Home Inc., Preferred Home Health Care
