In a decisive move to protect home healthcare workers and uphold the integrity of the Medicaid program, New York Attorney General Letitia James has secured agreements with All American Homecare Agency, Inc. (All American Homecare) and Crown of Life Care NY LLC (Crown of Life Care). These settlements address allegations of significant wage theft impacting home health aides and the submission of fraudulent claims to Medicaid. All American Homecare has agreed to repay $4 million, while Crown of Life Care will return $1.4 million to Medicaid and allocate over $1.5 million to compensate underpaid employees.
Attorney General James stated, “Home health aides are essential caregivers for our most vulnerable populations, and it is imperative that they receive fair compensation for their demanding work. The actions of All American Homecare and Crown of Life Care not only cheated their hardworking employees but also defrauded the state, diverting crucial resources from communities in need. Our office is committed to combating fraud in all its forms and ensuring that every New Yorker receives just treatment and fair wages.”
Echoing this sentiment, U.S. Attorney for the Eastern District of New York Breon Peace emphasized the importance of these settlements, saying, “Exploiting home health aides by denying them their legally mandated benefits under New York law and the Medicaid program is unacceptable. These settlements underscore our unwavering dedication to preventing fraud within government programs and safeguarding home health aides who provide indispensable care to some of our community’s most vulnerable members.”
The cases against All American Homecare and Crown of Life Care highlight violations of the New York Wage Parity Act. This crucial legislation mandates specific minimum wages and benefits for home care service agencies licensed by the state (LHCSAs) for staff providing home health aide and personal care services to Medicaid recipients. Currently, the Wage Parity Act stipulates a base wage of $15.00 per hour, with an additional benefit component of $4.09 per hour in New York City and $3.22 in Nassau, Suffolk, and Westchester counties. Compliance with these wage and benefit standards is a prerequisite for Medicaid reimbursement.
The joint investigation conducted by the Attorney General’s Office (OAG) and the Eastern District of New York (EDNY) revealed that both All American Homecare and Crown of Life Care failed to adhere to the Wage Parity Act. They underpaid their home health aides, submitted unlawful claims to Medicaid for services rendered by these underpaid workers, and falsely certified their compliance with wage parity regulations.
Settlement Details for Crown of Life Care
The investigation uncovered that between April 2014 and December 2018, Crown of Life Care systematically underpaid its home care aides, resulting in wage theft exceeding $1.5 million. This entire sum is now designated for repayment to both current and former employees affected by these wage parity violations. Specifically, $1,167,050 will be managed by the OAG for direct distribution to the impacted home health aides, and an additional $411,000 will be allocated as paid time off for current aides who are owed back wages.
Furthermore, Crown of Life Care is obligated to pay $1.4 million back to the Medicaid program. Of this amount, $840,000 will be returned to the state, and the remaining $560,000 will be remitted to the federal government. As part of its agreement with the OAG’s Labor Bureau, Crown of Life Care is also mandated to implement significant operational changes. These include revising company policies and procedures, providing comprehensive training to personnel on these updated policies (subject to OAG approval), and submitting regular reports to the OAG regarding staff wages and policy implementation for a period of six years. Failure to comply with these terms or to adequately compensate its aides will empower the OAG to initiate civil action against the agency, potentially demanding $15,000 in liquidated damages for each violation of its legal obligations.
Settlement Details for All American Homecare Agency
While All American Homecare did provide some benefits to its staff, the company fell short of the full $4.09 per hour benefit rate mandated by law, and did not provide it in a timely manner as required by the Wage Parity Act. In response to the investigation, All American Homecare took steps to compensate its affected home health aides. This included depositing funds into the 401(k) accounts of current employees and issuing back pay checks to former employees. All American Homecare has now repaid $4 million to Medicaid to resolve its liability for submitting false claims. The agreement also requires All American Homecare to self-report to the OAG for a two-year period to ensure ongoing compliance with the Wage Parity Act.
These investigations and subsequent settlements originated from complaints filed by whistleblowers under the qui tam provisions of both the New York False Claims Act and the federal False Claims Act in the U.S. District Court for the Eastern District of New York. These Acts empower individuals to file lawsuits on behalf of the government and share in any financial recoveries. The whistleblower complaints specifically alleged that All American Homecare and Crown of Life Care failed to pay their home health aides the wages and benefits mandated by the Wage Parity Act. The state subsequently intervened in these cases, leading to the settlements announced. This case represents the Labor Bureau’s largest settlement to date for Wage Parity Act violations, marking a significant victory in Attorney General James’ ongoing efforts to protect the rights and wages of New Yorkers.
Carmen Perez Collado, a former worker at Crown of Life Care, expressed her gratitude, stating, “Thank you to Attorney General James and her staff for their thorough investigation and for ensuring fairness and justice. I am thankful that our hard work in caring for individuals at home is valued and recognized.”
Susana, a current home health aide, also shared her appreciation, “Thank you, Attorney General Letitia James, for acknowledging our work and investigating the company. It was clear there were irregularities, and I am glad they have been addressed.”
The Medicaid Fraud Control Unit (MFCU), which played a crucial role in these investigations, is primarily federally funded, with 75 percent of its funding from the U.S. Department of Health and Human Services. The remaining 25 percent is funded by New York State. Importantly, through its law enforcement actions, MFCU consistently recovers more funds for the state than it receives in state funding.
The investigations and settlements were a collaborative effort between the OAG and the U.S. Attorney’s Office for the Eastern District of New York, demonstrating a united front against fraud and worker exploitation in the home healthcare industry, particularly concerning agencies like All American Home Care and Crown of Life Care. These settlements serve as a strong reminder of the importance of compliance with labor laws and ethical practices within the home healthcare sector.
