CenterLight: Paid for Ineligible Members and Missing Care

The CenterLight Medicaid settlement announced in 2016 required $46,751,086 for ineligible enrollment, followed by a separate $10 million settlement in 2018 over missing long-term care services and late disenrollment. CenterLight admitted conduct in both resolutions. For someone inside a health plan, the connection is familiar: the enrollment system keeps a member on the books, the government keeps paying, and the service records tell a different story.

The later state agreement put the combined payment at $10,364,301, including a separate $364,301 for Medicaid overpayments identified during the investigation.

CenterLight Healthcare operated a New York managed long-term care plan under a state contract. The managed care fraud case began as a whistleblower’s qui tam case, which the United States joined. Its two settlements reached different parts of the same business: who qualified for enrollment, whether contracted agencies delivered the required care, and what CenterLight did with payments it should not have received.

The Monthly Payment Behind the CenterLight Case

Medicaid paid CenterLight approximately $3,600 to $3,800 per member each month to arrange and provide long-term care, including months when, CenterLight admitted, some residents received no qualifying care. The Justice Department’s account of the adult-home case describes a contract with the New York State Department of Health and services that included nursing, therapies, home health aides, personal care in the home, and adult day health care.

Capitation attaches the payment to enrollment. The plan then arranges care through its providers. CenterLight contracted with social adult day care centers for personal care and with licensed home care agencies for skilled nursing and home health aide services to adult-home residents. That puts the enrollment decision, the provider’s work and the plan’s supervision in the same payment chain.

In a case about capitation for care not delivered, the state’s payment record shows that the plan received money for a member’s enrolled month. The care plan and service records show what was supposed to happen during that month and whether it did. At CenterLight, eligibility and service failures reached the monthly payments themselves.

Ineligible Enrollment and the Social Adult Day Care Centers

CenterLight admitted that 1,241 members referred by social adult day care centers, or using their services, were ineligible for its managed long-term care plan. The January 21, 2016 announcement describes members who did not qualify when enrolled and others who no longer qualified at reassessment but remained enrolled too long.

The eligibility standard described in that announcement required a nursing-home level of care and at least 120 days of community-based long-term care, among other conditions. Going to a social adult day care center did not establish that need. The government said CenterLight continued seeking and receiving monthly payments well after the health department issued guidance in early 2013 making that point explicit.

The settlement resolved allegations that CenterLight used improper marketing practices to enroll members through the centers and induced members to use them as their primary source of personal care. CenterLight’s admissions reached the providers themselves: some centers did not furnish services that qualified as personal care under its Medicaid contract. Others were not legally permitted or competent to provide those services.

The federal settlement entry, number 12 in the court docket gives a concrete example. Some members’ primary personal care service was help with housekeeping. CenterLight admitted that this did not meet the community-based long-term care definition when the health department’s June and August 2013 policies took effect.

Those facts matter to anyone who worked on assessments or provider credentialing. The center’s referral, the member’s actual needs, the services listed in the care plan and the center’s ability to deliver them all had to fit together. We call that an absurd bargain: Medicaid paid for personal care from centers that were not legally allowed to give it. A network entry had become a substitute for the care the contract required.

The Settlement Reached Enrollment, Marketing, and Provider Oversight

The settlement required CenterLight to comply with the rules governing enrollment, assessment, reassessment and disenrollment. It also required the company to credential only properly certified day care centers capable of providing qualifying personal care, monitor the services they furnished, and prohibit marketing directed at enrolling plan members through those centers.

Those requirements followed the business from recruitment through the member’s continued enrollment. For an enrollment employee, the relevant decision could be admitting a person whose assessment showed no qualifying need. For a provider-network employee, it could be approving a center that lacked the necessary qualifications. For a care manager, it could be seeing that the services in the care plan were not reaching the member. The settlement put responsibility for those connected decisions on CenterLight.

Adult-Home Residents Went Without Required Services

The settlement announced March 28, 2018 concerned 186 adult-home residents who went without required community-based long-term care during certain months of enrollment. The New York settlement agreement defines the conduct period as April 1, 2012 through September 30, 2015.

Under the eligibility standard set out in this agreement, a beneficiary had to be assessed as needing community-based long-term care for more than 120 days from enrollment. CenterLight hired licensed home care services agencies to deliver skilled nursing and home health aide services to adult-home residents. Its agreement admitted that the required services did not reach the members during certain enrolled months. For some individuals, there was no record showing qualifying services for most of their enrollment.

The government’s complaint, as described in the Justice Department’s announcement, alleged that CenterLight knew some agencies provided substandard care and lacked proper service documentation but failed to act promptly. It alleged that many of the affected members received no qualifying community-based long-term care for most of their enrolled months.

CenterLight’s admissions were specific. It failed to disenroll the members on time after they became ineligible, received capitation it was not entitled to, and failed to adequately oversee and monitor the agencies providing their care. The plan had hired the agencies and remained responsible for ensuring that the contract’s services reached its members.

We see a direct cost to both sides of Medicaid here: residents went without required care, and taxpayers funded enrolled months that CenterLight admitted should not have been paid.

CenterLight Knew Earlier Disenrollment Was Required

CenterLight admitted that, when it finally removed some members from the plan, it knew they should have been removed earlier but failed to repay Medicaid for the intervening payments. The company’s own admission states:

That is the connection between late disenrollment and retained Medicaid capitation. Ending future payments left an earlier payment problem to resolve. CenterLight accepted responsibility for knowing about that earlier problem and leaving the money unreturned.

For an insider, the date matters because it connects a decision to a payment period. We would want to understand when the plan recognized that a member no longer qualified, when enrollment actually ended, and what happened to payments for the gap.

CenterLight had sold its managed long-term care plan in early 2017. The later settlement concerned its earlier operation of that plan. The Southern District of New York U.S. Attorney’s Office handled the case through its Civil Frauds Unit, with assistance from the Department of Health and Human Services’ Office of Inspector General and investigative work by New York’s Medicaid Fraud Control Unit.

What Evidence Is Needed to Prove Fraud?

In a case like CenterLight, the evidence connects the member’s eligibility, the required care, actual services, monthly payments and what the plan knew. The admissions show why enrollment, care management, provider oversight and finance can each hold a different part of a Medicaid False Claims Act case.

Assessment files, care plans, agency visit records and payment histories can show where those accounts diverged. We work with your knowledge of the decisions behind those records to build the case. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Why the Plan’s Service Records Need an Outside Check

A plan’s own service report needs an independent check. The National Health Law Program’s 2015 A Guide to Oversight, Transparency, and Accountability in Medicaid Managed Care explains that plans bear the loss when care costs exceed capitation. The incentive runs the other way when service use falls:

The guide also identifies plan-reported encounter data as a foundation for quality measures and capitation rates, making independent checks of their accuracy critical. An encounter record is the plan’s report that a member received a service. The underlying care record is where that representation can be tested.

The 1999 report Controlling Fraud and Abuse in Medicaid: Innovations and Obstacles, from seminars sponsored by the Health Care Financing Administration, identified a recurring oversight mistake: confusing a plan’s incentive to stop providers from cheating it with oversight of the plan’s own diversion of capitation from care. The report also identified inadequate encounter data as an obstacle to assessing quality. CenterLight’s admissions give that distinction a concrete setting: the plan received the monthly money and accepted responsibility for its own enrollment and supervision failures.

A service record can also attribute missing care to the member. In the separate CareSource case, the company agreed to pay $26 million to resolve allegations of missing screening, assessment and case management followed by false reporting to Ohio. Its whistleblowers’ complaint alleged that families had never been offered services recorded as refused:

That allegation shows why the people handling member communications can matter as much as the payment report. A recorded refusal, a completed assessment and a paid enrollment month each make a representation about what happened. An insider can explain how those entries were made and whether the care reached anyone.

You Know Why the Payments Continued

If you worked with enrollment, home care agencies or payment corrections and know why a plan kept collecting for missing care, speak to one of our Whistleblower Experts about what happened inside the plan. We build the case with you around the members, the care and the payment decisions, and bring in Medicaid fraud whistleblower lawyers who understand plan contracts. We stay beside you throughout the process to build your strongest Medicaid whistleblower case.