In a significant financial settlement that highlights issues with Medicaid billing practices, Community Options, Inc. (COI) and its New York affiliate, Community Options New York, Inc. (CONY), have agreed to a $5 million settlement with the U.S. government, the Southern District of New York's Acting U.S. Attorney Matthew Podolsky announced yesterday, reports from the U.S. Attorney's Office reveal that the organizations confessed to several compliance failures in billing Medicaid for Adult Day Habilitation services which are vital programs designed to improve independence for adults with developmental disabilities.
The settled allegations detailed by the Acting U.S. Attorney indicate that between January 1, 2017, and September 13, 2024, COI did not maintain proper policies or adequately train their employees to comply with the documentation requirements set out by the New York State Office for People With Developmental Disabilities (the "OPWDD Requirements"), as a result COI employees were unable to document services in line with the necessary standards, and yet claims to Medicaid were still submitted, and overpayments were not returned as mandated by state law. This oversight, the intentional lapse of duty, strikes at the heart of the safety nets intended to ensure our most vulnerable citizens are provided with not just services but dignity and a pathway to a fulfilling daily life.
In a development that underscores the gravity of accurate Medicaid billing, especially for services attached to the well-being of vulnerable populations, the defendants have also entered into a Corporate Integrity Agreement with HHS-OIG, ensuring sustained adherence to federal health care program requirements. Acting U.S. Attorney Matthew Podolsky said: “Community Options billed Medicaid for services that failed to meet program requirements and retained potential overpayments received from Medicaid when it had an obligation to report and return those funds. Community Options has now admitted and accepted responsibility for its conduct. This Office will continue to ensure that our most vulnerable New Yorkers receive the services they deserve, and that our federal health care programs are protected against fraud and abuse,” as reported by the U.S. Attorney's Office.
Pertinent to the settlement's backdrop, HHS-OIG Special Agent in Charge Naomi Gruchacz emphasized the duty of federal healthcare participants to uphold the laws safeguarding the integrity of program funds and the quality of patient services, stating, “Individuals and entities that participate in the federal healthcare system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate services to patients. The settlement in this case involves a provider that is responsible for a vulnerable population, for which it should be prioritizing quality services.” The financial particulars of the settlement stipulate that the Defendants will pay the U.S. $2,148,540.37 and the State of New York $2,868,085.74, addressing both federal and state claims against them for a cumulative recovery of $5,016,626.11, according to the same press release.
There's an important note to conclude on, this case was aided by the joint efforts of the Medicaid Fraud Control Unit at the New York State Attorney General’s Office and HHS-OIG, which Assistant U.S. Attorney David E. Farber is overseeing from the Office's Civil Frauds Unit.
