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Post date: August 20 2014

A.G. Schneiderman Announces $2.2 Million Settlement With New Rochelle Nursing Home For Fraudulent Billings

New York To Receive $1.3 Million Of Total Restitution; Facility Submitted More Than 62K Fraudulent Reimbursement Claims To Medicaid

Schneiderman: We Will Take Action Against Those Who Improperly Drain Medicaid Funds

BROOKLYN - Attorney General Eric T. Schneiderman and U.S. Attorney Loretta Lynch today announced that they have entered into settlement agreements with a New Rochelle nursing home resolving allegations that the facility and its owner submitted tens of thousands of inflated claims to the New York State Medicaid Program. The claims sought reimbursement for services provided, but at artificially high rates. Under the agreements, Ralex Services, Inc., doing business as Glen Island Center for Nursing and Rehabilitation, and its owner, Leah Friedman, will return $2.2 million to Medicaid, a program jointly funded by the state and federal governments. New York will receive $1,320,000 of the total restitution funds.

“Safeguarding public health care dollars is of critical concern, and my office will investigate—and prosecute—all allegations of impropriety by health care providers who obtain Medicaid funds to which they have no right,” Attorney General Schneiderman said. “We must care for our most vulnerable New Yorkers and at the same time protect our taxpayer dollars. Today we are saying: There is one set of rules for all nursing home providers-- and my office is here to make sure those rules are followed.” 

According to allegations made by the state and federal governments, the 182-bed Glen Island facility, located at 490 Pelham Road in New Rochelle, submitted more than 62,000 false claims to New York’s Department of Health from April 2002 to November 2006. The false claims used Medicaid reimbursement rates based, in part, on up-coded Patient Review Instruments (PRIs), which falsely represented the degree of care required by many Glen Island residents during the mandatory quarterly assessment periods covered by these submissions. The defendants exaggerated residents’ diagnoses, conditions and required treatments in the reports. They routinely stated that residents were receiving treatments, including for oxygen and suctioning, when such treatments were neither required nor given. 

In furtherance of this scheme, and in response to the Attorney General’s request for records, the defendants attempted to cover up their fraudulent submissions and false claims by making false entries and forgeries into Glen Island residents’ medical records. These falsified records were later turned over to the New York State Attorney General’s Medicaid Fraud Control Unit. Two former Glen Island nurses, who participated in “tampering parties” at which records were falsified, were also convicted by the Attorney General’s Office. For example, one false score sheet designated a resident as needing daily oropharyngeal suctioning, a treatment which clears secretions from airways of patients, when in fact the resident did not need or receive the treatment. By routinely inflating patient scores, Glen Island received higher Medicaid reimbursement rates.

Today’s settlement follows the 2011 conviction of former Glen Island Administrator Eufemia Fe Salomon-Flores, who pleaded guilty to felony grand larceny and admitted that she had submitted information to DOH that falsified the type of care residents received. She served a 1- to 3-year state prison sentence, lost her Nursing Home Administrator license and has been excluded from participating in the state’s Medicaid program. 

Marlon Legaspi pleaded guilty in December 2011 to a misdemeanor count of attempted tampering with physical evidence. Maria Eufemia Salomon-Rosanes, a niece of Fe Salomon-Flores, pleaded guilty to the same misdemeanor charge in March 2012. Both defendants were excluded from the Medicaid program. 

The agreements – one with the State and one with federal authorities – followed a joint investigation by the Attorney General’s Medicaid Fraud Control Unit and the United States Attorney’s Office for the Eastern District of New York. The investigation came after allegations were lodged by whistleblower Carolyn Hinestroza, a former assistant director of nursing at the facility, alleging violations of the New York False Claims Act. Following the investigation, the offices intervened in the whistleblower case against Glen Island, Friedman and Will-Maur, LLC, the real estate holding company that owns the Glen Island land and premises. Friedman, her husband, Burton Flax, and their two children are the members of Will-Maur.

Attorney General Schneiderman thanks United States Attorney Loretta E. Lynch, Eastern District of New York, and her staff for their cooperation in this case.  The federal case was handled by Assistant United States Attorney Erin Argo. 

The state case was handled by Special Assistant Attorney General Jill D. Brenner and Principal Special Auditor Investigator Ann Winslow and Senior Special Investigator Carlos Miranda. The underlying criminal prosecution of Eufemia Fe Flores-Salomon was handled by Special Assistant Attorney General Susan Bloom of MFCU’s Pearl River Office. The Medicaid Fraud Control Unit is led by Acting Director Amy Held. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan. 

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