State Collects $4.2 Million For Medicaid Program From Sale Of Pennsylvania Nursing Home Once Owned By Convicted Owner

Attorney General Spitzer today announced the successful conclusion of the final proceeding against Heritage Nursing Home and its convicted owner, David Arnold, which resulted in the sale of Heritage Nursing Home, a 145-bed facility located in Athens, Pennsylvania, which provides care to many New York Medicaid patients. The proceeds of the sale, $4.2 million, will be returned to the Medicaid program with portions going to both the State and to the counties.

In 2004, Spitzer’s Medicaid Fraud Control Unit (MFCU) pursued both criminal and civil cases against Heritage and Arnold as part of the Attorney General’s Nursing Home Initiative, an ongoing review of illegal conduct in nursing homes, which has resulted in a series of unprecedented criminal and civil actions against nursing home owners and executives who have profited while failing to provide adequate care to nursing home residents.

The Heritage investigation revealed that for years Arnold failed to provide important services to New York Medicaid patients, including physical, occupational and speech therapies and dental services. Arnold collected payment for many of these services from both Pennsylvania and New York. Following a trial in Albany County in January 2004, Arnold and Heritage were convicted of multiple counts of Grand Larceny. Arnold is currently serving a 4-12 state prison sentence.

In addition Spitzer’s office sued both Heritage and Arnold seeking treble damages. That lawsuit led to the compulsory sale of the Heritage nursing home and the State’s receipt through that sale of $4.2 million.

"This case shows that we will use every tool available to pursue fraud against the New York Medicaid Program wherever it occurs," Spitzer said. "The criminal and civil sanctions imposed on Heritage and Arnold demonstrate our continuing efforts to prosecute fully any crimes we uncover and return misappropriated funds to the State."

Since MFCU secured Arnold’s ouster from the home, patients have been receiving needed services and therapies. The Attorney General thanked the Department of Health for their assistance in this matter. In addition, the Attorney General thanked Janet Gerber of Clymer, PA who was appointed as the acting administrator of Heritage Nursing Home after Arnold's conviction, for her work in ensuring the delivery of care to the residents of the nursing home.

The investigation and criminal prosecution of Arnold and the Heritage Nursing home was conducted by the Special Projects Unit of MFCU. The civil lawsuit was pursued by the MFCU’s Civil Enforcement Unit.