Two Brooklyn Health Care Agencies Settle Fraud Lawsuits

Brooklyn, NY Two Brooklyn Home Care Service agencies failed to cheat both the federal government and their health care aids and now they have to pay nearly $7 million in back wages and Medicaid payments following two settlement agreements with New York Attorney General Letitia James.

In its news release (March 25, 2022), the Justice Department stated that All American and Crown of Life violated the federal False Claims Act and New York State’s False Claims Act in claiming that they paid their home care aides the minimum wages required under New York State law. The agencies received millions of dollars in funding from Medicaid, which is funded in part by the federal government, and much of that money was meant to pay the wages and benefits of their aides.

Investigation and the Wage Parity Act

The Medicaid Fraud Control Unit of the Office of the New York State Attorney General partnered in the government’s investigation and resolution that began after whistleblowers in May 2107 provided information that the health care agencies had violated the state's Wage Parity Act by paying employees less than minimum wage. The Wage Parity Act , which was passed in 2012, was created to give home care workers additional compensation to assist a higher living wage. The additional compensation can be in the form of salary, benefits, or a combination of both And effective October 1, 2020, employers of home care aides subject to the Home Care Worker Wage Parity law must provide employees a notice which details the supplemental benefit portion of the minimum rate of home care aide total compensation.)

The U.S. Department of Justice states the following:

The New York Wage Parity Act, Public Health Law sets minimum wage and benefit requirements for LHCSAs that employ home care aides who render services to Medicaid recipients in New York City and in Nassau, Suffolk or Westchester Counties.  Under the Wage Parity Law, which is funded by Medicaid aides are to be paid a minimum amount in total compensation. That compensation comes in the form of a base wage and a supplemental benefit. The base wage must be paid in cash. The benefit portion can include the value of vacation, holiday, and sick pay, among other things.  It can also include health insurance, pension plans, or educational assistance. Today, the minimum amount of total compensation for an aide in New York City is $19.09 per hour; for Nassau, Suffolk, and Westchester Counties, the minimum is $18.22 per hour.

The Settlement

Despite not properly paying their workers what they were owed, both Crown of Life Care and American Homecare had certified compliance with the Wage Parity Act and received Medicaid reimbursement. According to Law360, Crown underpaid its aides by over $1.5 million from April 2014 until December 2018, which the settlement requires be paid back. Crown’s payback breaks down to $1,167,050 to home health aides affected; $411,000 in the form of paid time off for current workers who are owed back pay; $840,000 to the state Medicaid program and $560,000 to the federal program. As well, Crown is also required as part of the settlement to revise its policies and get its employees up to speed and regularly report wages and new policies to the attorney general's office for the next six years. If Crown doesn't comply, they could be on the hook to the attorney general's office could for an additional $15,000 for violating the terms of the settlement.

As for All American, it wasn’t as despicable as Crown—but shame on them both. Although it didn’t pay staff the full required minimum wage, the agency did provide certain benefits, as reported by the attorney general’s office. And during the investigation All American paid its staff back. All American’s settlement amounts to repaying $4 million Medicaid and self-report to the attorney general's office for the next two years to make sure it complies with the Wage Parity Act.

“It is outrageous to cheat home health aides of their hard earned benefits guaranteed under New York law and the Medicaid program,” stated United States Attorney Breon Peace. “These settlements reflect this Office’s firm commitment to preventing fraud in government programs and protecting home health aides—who perform physically and emotionally taxing work in caring for some of the members of our community most in need.” 

The cases are United States of America et al. v. Crown of Life Care Inc. et al. and United States of America et al. v. All American Homecare Agency et al., in the U.S. District Court for the Eastern District of New York.