Whistleblower Lawsuit Settles at $46.7M on Centerlight's Enrollment of Ineligibles in Medicaid Long-Term Care Plan

NY Attorney General Announcement

A lawsuit filed by whistleblower David Heisler under the False Claims Act has resulted in the recovery of $46.7 million from New York-based Centerlight Health Inc. and Centerlight Health System Inc. (collectively, Centerlight) according to a statement by the NY State Attorney General’s office.

The settlement resolves allegations that Centerlight enrolled ineligible members in their Medicaid long-term care plan (MLTCP). The State of New York charged Centerlight with enrolling 1,241 non-eligible members in the MLTCP. Centerlight received $3,800 per month as a reimbursement for the care of each participating individual.

To qualify for long term care covered by Medicaid, beneficiaries must require a nursing home level of care and a minimum of 120 days of community-based long-term care. In 2013, the New York State Department of Health issued guidances  clearly stating that the fact that someone attended an adult day care center did not make them eligible for Medicaid’s long-term care plan. In spite of this, Centerlight admittedly maintained the non-eligible individuals in its MLTCP and continued to receive reimbursements from Medicaid. 

The type of care that was supposed to be provided under the MLTCP included physical therapy, assistance with daily living, basic nursing, and occupational therapy, among other services. Some of the 1,241 individuals referenced in the legal proceedings were ineligible for the MLTCP from the beginning, while others became ineligible at some point, but were still kept in the program. There were also allegations that Centerlight used improper marketing to enroll members through social adult day care centers.

Ironically, a New York Times article from February 2012 mentioned Centerlight as one of the pioneers of non-institutionalized long-term care, explaining that this alternative was saving “taxpayer dollars” by keeping people who did not need 24-hour care away from nursing homes and simply covering their specific needs as they arose. At the time, the program managed by Centerlight was reported to have 2,500 members across New York´s metropolitan area.

$28M Medicaid Settlement to NY - $18.7M Medicare Recovery to U.S.

Under the terms of the False Claims Act settlement approved by Judge Lewis A. Kaplan on January 20th, CenterLight Healthcare Inc. and CenterLight Health System agreed to pay $18.7 million to the Federal government and $28 million to the State of New York.

New York Attorney General Eric Schneiderman´s comments on the settlement were  categorical: “It’s simple: CenterLight Healthcare did not play by the rules.  We won’t tolerate companies that seek to exploit the system for profit.”

Over the last couple of years, the government has been fighting relentlessly against Medicaid fraud. “CenterLight Healthcare improperly received millions of Medicaid dollars by enrolling ineligible members into its managed care plan. With this settlement, CenterLight now has admitted to its conduct and will pay over $46 million,” Manhattan U.S. Attorney Preet Bharara commented.  

As part of the settlement, Centerlight agreed to monitor its network of social adult day care centers and follow Medicaid´s strict eligibility guidelines for both centers and members. For two years, the MLTCP will be under observation by an independent compliance monitor, and Centerlight has also agreed to stop targeting centers to enroll new members.

Whistleblower David Heisler Reward for Healthcare Fraud Reporting

Whistleblower David Heisler, who is ultimately responsible for uncovering Centerlight´s wrongdoings, will receive a share of the recovery from both the Federal Government and the State of New York. The amount of the whistleblower reward, which is typically 15-25%, but can go as high as 30%, remains undisclosed at this time.


Medicaid Fraud Hotline: 888.742.7248 or Report Online