Home Health Care Agency Settles Fraud Claims for $1.26 Million and Agrees to Pay $2 Million in Wages and Benefits to Underpaid Aides

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FILE PHOTO: American flag waves outside the U.S. Department of Justice Building in Washington

Breon Peace, United States Attorney for the Eastern District of New York, and Letitia James, New York State Attorney General, announced today a settlement agreement with a Brooklyn-based licensed home care service agency (LHCSA) White Glove Community Care, Inc. (White Glove). The settlement agreement addresses allegations that White Glove violated the federal False Claims Act and New York State’s False Claims Act in claiming that it paid its home care aides the minimum wages required under New York State law. The agency received payments from Medicaid, which is funded in part by the federal government, and is entitled to receive that money only if it paid its aides the required wages and benefits.

“The arduous work that these aides do, day after day, ensures that some of our most vulnerable neighbors receive the care and are shown the dignity that they deserve,” stated United States Attorney Peace. “This settlement—the third in our continuing investigation of certain licensed home care service agencies—reflects this Office’s ongoing commitment to providing home health aides the hard-earned benefits guaranteed them under New York law and the Medicaid program.”

Mr. Peace thanked the Medicaid Fraud Control Unit of the Office of the New York State Attorney General for its partnership in the government’s investigation and resolution of this important case.

“Home health aides work tirelessly to provide critical care for our most vulnerable neighbors, and they deserve to receive adequate and fair compensation for their hard work,” said Attorney General James. “White Glove cheated their employees, and they cheated the everyday New Yorkers whose tax dollars fund the Medicaid program. My office will always stand up against bad actors, and ensure all workers get fair pay for their work.”

The New York Wage Parity Act sets minimum wage and benefits requirements for LHCSAs that employ home care aides who render services to Medicaid recipients in New York City and in Nassau, Suffolk, and 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.

Home health aides perform all aspects of personal care for sick or homebound patients and frequently work long shifts lasting up to 24 hours. The tasks performed in caring for patients are demanding and can consist of assisting or lifting patients out of bed and bathing, dressing, grooming, preparing meals for and, in some instances, feeding them. Patients may suffer from physical or mental disorders that can make the work of the aides physically and emotionally taxing. In fact, it was in recognition of the difficulty of this work that New York passed the Wage Parity Act.

The Settlement

This Office, in coordination with the New York State Attorney General’s Office’s Medicaid Fraud Control Unit, commenced an investigation after whistleblowers alleged that certain LHCSAs had knowingly defrauded the federal government and New York State by underpaying home health aides in violation of the Wage Parity Act. The government’s investigation revealed that White Glove certified its compliance with the law, even though it had not paid its aides the requisite compensation, and sought and received reimbursement from Medicaid.

Under the terms of the agreement with the United States and New York State, White Glove has agreed to pay $505,616.98 to the United States and $758,425.47 to New York State for conduct that took place in the years 2012 to 2018.

In addition to the payments to resolve the government’s fraud claims, White Glove is now paying its aides the wages and benefits it was required to pay under the Wage Parity Act, including the wages that were owed to current and former aides in prior years. It has agreed to pay its aides $2 million for past due wages pursuant to a separate agreement it reached with the New York State Office of Attorney General Labor Bureau. Moreover, White Glove has admitted, acknowledged, and accepted responsibility for underpaying its home health aides by failing to pay Wage Parity Act rates.

Today’s settlement with White Glove follows similar settlements with the LHCSAs All American Homecare Agency and Crown of Life Care NY LLC, announced earlier this year.

The case is being handled by Assistant U.S. Attorneys Michael Blume and Sean Greene-Delgado of the Office’s Civil Division.