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CenterLight Healthcare Fraud Charges Result in $10.3M Settlement

CenterLight Healthcare Fraud

CenterLight Healthcare agreed to pay $10.3 million to settle allegations that it billed for services it did not provide and failed to unenroll residents in its managed long-term care plan after they were no longer eligible to receive services.

The charges stemmed from allegations brought by a whistleblower, highlighting the far-reaching power whistleblowers have in combatting fraud against government agencies.

CenterLight Medicaid Fraud Was Linked to 186 Clients

CenterLight was accused of failing to ensure 186 home residents enrolled in the service provider’s long-term managed care plan received the services they were eligible for.

CenterLight Healthcare collected millions of dollars in Medicaid payments to provide long-term care services to adult home residents in its managed care plan, but frequently failed to deliver these services,” said Geoffrey Berman, U.S. Attorney for the Southern District of New York.

Specifically, the allegations involved CenterLight’s actions as a Medicaid long-term care provider for New York between 2012 and 2015. Members in CenterLight’s managed long-term care plan were required to show they needed community-based long-term care services — including nursing services and adult day care—for greater than 120 days from the date they enrolled in the plan. The members relied on CenterLight to provide those services and the healthcare company was paid between $3,600 and $3,800 a month per enrolled member.

CenterLight, in turn, hired contractors to provide that care to its members, but an investigation found that CenterLight did not ensure its clients received the care it was paid for. In fact, some members received no care in the time they were enrolled, while others received care for only a limited time.

The government alleged CenterLight knew its contractors did not provide adequate care for members but failed to take necessary steps to address the problem.

CenterLight Admits to Wrongdoing

As part of the $10 million settlement, CenterLight admitted wrongdoing and accepted responsibility for:

  • Failing to provide required long-term care services for 186 members;
  • Failing to disenroll the 186 members when they were no longer eligible for the long-term care plan, allowing CenterLight to continue receiving money it should not have; and
  • Failing to oversee and monitor its own contractors to ensure clients received the services they were eligible for.

As part of the settlement, the State of New York will receive $6.36 million while the federal government will receive $4 million.

When a care provider submits phony bills to Medicaid, they rip off New Yorkers and undermine the integrity of our Medicaid system,” said New York State Attorney General Eric Schneiderman in a statement. “Today’s settlement should serve as another reminder that we will hold accountable those who seek to game the system for their own benefit.”

CenterLight Healthcare Fraud Charges Originated from Whistleblower Lawsuit

The allegations of fraud were first uncovered by an earlier whistleblower lawsuit that the government intervened in. That lawsuit involved allegations that CenterLight used social adult day care centers to enroll members into its managed long-term care plan, even though those members were not eligible for the plan. According to the Justice Department, CenterLight offered individuals, gifts, incentives and false promises to encourage them to enroll in a long-term care plan they were not eligible for.

The allegations resulted in a $46.7 million settlement in January of 2016, and the relator received a whistleblower reward for bringing the allegations to the government’s attention.

Whistleblowers Vital to Protecting Integrity of Medicaid

Fraud costs taxpayers and the government billions of dollars annually. Whistleblowers who bring forward qui tam claims against unethical companies play a vital part role in protecting the integrity of government programs like Medicaid.

Under qui tam claims, private citizens can file civil actions on the government’s behalf. If the government is successful in its claim against an accused organization or person, the whistleblower can receive a portion of the money recovered by the government. Whistleblowers who bring fraud allegations to the government’s attention are also protected against retaliation from the organizations they bring claims against.



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