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Constantine Cannon Announces $57 Million Whistleblower Settlement with the Largest Not-For-Profit Home Health Care Agency in the United States

Posted  June 25, 2020

The Visiting Nurse Service of New York settles False Claim Act lawsuit alleging it failed to provide home health care visits and services to tens of thousands of New Yorkers and fraudulently billed Medicare and Medicaid.

Constantine Cannon is pleased to announce a $57 million settlement of the False Claims Act lawsuit its whistleblower client brought against the Visiting Nurse Service of New York (VNSNY).  VNSNY is the largest not-for-profit home health care agency in the country, serving roughly 150,000 patients a year in New York, most of whom are elderly and/or disabled. A copy of the settlement can be found here.

The whistleblower who filed this action, Edward Lacey, was an executive at VNSNY for 16 years.  In his complaint, Mr. Lacey alleged that VNSNY failed to provide its patients all the critical nursing and therapy visits and services their doctors prescribed under the patient Plans of Care.  He contended that by failing to provide this care, VNSNY endangered the welfare of tens of thousands of its patients while maximizing the company’s Medicare and Medicaid reimbursement.

This is the first reported False Claims Act settlement involving allegations of a home health agency failing to follow patient Plans of Care.  It also is the largest non-kickback False Claims Act settlement ever against a home health care company and the second largest settlement of any home health care fraud case.

Mr. Lacey’s claims concerning alleged Plan of Care failures impact the entire home health care industry.  That is why the National Association for Home Care & Hospice, a trade association that represents the interests of thousands of home health care agencies across the country, came to VNSNY’s defense in this action.  In a brief it submitted to the Court, the association argued that a decision in this case “has the potential to impact over 6.6 million claims submitted for Medicare payment of home health services provided to over 3.4 million Medicare beneficiaries annually by nearly 12,000 Medicare and Medicaid participating home health agencies.”

Mr. Lacey alleged that under VNSNY’s “accept all referrals” policy, the company took on patients regardless of whether it had the capacity to handle them.  According to the complaint, even though VNSNY only provided a fraction of the visits and services the Plans of Care prescribed, the company still collected hundreds of millions of dollars of Medicare and Medicaid payments without disclosing pervasive Plan of Care failures.

Mr. Lacey alleged additional misconduct by VNSNY, including reporting and billing for nursing and therapy visits the company never provided and failing to comply with home health aide supervision requirements.

Gordon Schnell of Constantine Cannon, counsel for Mr. Lacey, stated “we hope this settlement sends a message to the entire home health care industry of how important it is to follow patient Plans of Care and provide all the visits and services referring physicians have prescribed.”

Marlene Koury of Constantine Cannon added: “Mr. Lacey came to us with grave concerns regarding VNSNY failing to provide critical home health care to elderly and sick New Yorkers.  We are very pleased with the result and hope that yet-to-be whistleblowers are inspired by Mr. Lacey’s courage and determination.”

Dan Vitelli of Constantine Cannon further added: “This case reinforces the important role whistleblowers play in bringing lawsuits under the False Claims Act, a role that has grown even more important across all industries with the government’s extensive payouts related to the impacts of COVID-19.”

Hamsa Mahendranathan of Constantine Cannon stated: “Home health agencies provide vital services to some of our most vulnerable neighbors, many of whom do not have the ability or resources to demand the care they have been prescribed. We hope this settlement encourages other whistleblowers to be a voice for the voiceless.”

As he stated in his complaint, Mr. Lacey originally brought his concerns to the attention of VNSNY’s senior management and filed this case only after the company failed to take the corrective actions Mr. Lacey believed were warranted.  He filed the lawsuit in 2014 under the qui tam provisions of the False Claims Act, which permits whistleblowers to file lawsuits on behalf of the government for fraud committed against the government.

The False Claims Act entitles whistleblowers like Mr. Lacey to receive a whistleblower reward of up to 30% of the government’s recovery.  Because of the valuable contribution Mr. Lacey brought forth with his filing of this matter, the government has decided to make Mr. Lacey an award at the high end of the allowable range.

In addition to Mr. Schnell, Ms. Koury, Mr. Vitelli, and Ms. Mahendranathan, Mr. Lacey was also represented by Max Voldman, Leah Judge, Gary Reilly and Ginger Buck, all of Constantine Cannon.  Constantine Cannon is the largest international law firm dedicated to representing whistleblowers, with offices in New York, London, San Francisco and Washington, D.C.  Click here to learn more about Constantine Cannon’s whistleblower practice, and here for more information about home health care fraud.

About Constantine Cannon LLP

Constantine Cannon has the world’s largest international whistleblower practice, with offices in New York, Washington, D.C., San Francisco, and London. The firm’s team of dedicated whistleblower lawyers represent whistleblowers under federal and state False Claims Acts as well as the whistleblower programs of the IRS, SEC, CFTC, DOT, and others.

Constantine Cannon’s experience spans across multiple practice areas that include antitrust and complex commercial litigation, whistleblower representation, government relations, securities, and e-discovery. The firm’s antitrust practice is among the largest and most well recognized in the nation.