RiverSpring and ElderServe: Capitation Without Qualifying Services

In the RiverSpring Medicaid settlement, RiverSpring and ElderServe agreed to pay $10,159,131 and admitted collecting monthly Medicaid payments without providing required qualifying services or adequately documenting them. For someone inside a managed long-term care plan, the connection is concrete: enrollment generated the payment, while the care records had to support keeping it. RiverSpring admitted that, for some members, the service or documentation gap lasted their entire enrollment.

The settlement approved on May 23, 2024 covered RiverSpring Living Holding Corp. and ElderServe Health, Inc., doing business as RiverSpring at Home. The New York nonprofit corporations administered a managed long-term care plan for Medicaid beneficiaries, arranging health and long-term care services. A private whistleblower brought the qui tam case under the False Claims Act, and the government joined it. The U.S. Attorney’s Office for the Southern District of New York handled the case.

The case puts Medicaid capitation for care not delivered beside a separate failure RiverSpring also admitted: inadequate records of qualifying care. Both mattered to the monthly payments.

How RiverSpring’s Monthly Medicaid Payments Worked

Medicaid paid RiverSpring for each enrolled member each month. The payment arrived through the plan’s enrollment arrangement, rather than as reimbursement for each individual visit.

The New York State Department of Health contract supplied the care obligation. As the Justice Department describes it, eligibility required an assessment showing that a beneficiary needed at least one qualifying community-based long-term care service for more than 120 days from the effective date of enrollment. The listed services included nursing and therapies in the home, home health aide services, personal care at home and adult day health care.

To receive capitation, RiverSpring had to ensure members received qualifying services during enrollment or otherwise remained appropriately enrolled under the contract and the Department of Health’s disenrollment practices. That connection explains why a payment keyed to enrollment still depends on care. The state pays the plan to arrange and provide the required services. When we examine this kind of case, the contract tells us what the plan owed the member, and the enrollment and service records tell us whether the payment had that support.

What RiverSpring Admitted About Care and Documentation

RiverSpring admitted that it received capitation to which it was not entitled in many instances where qualifying services were either not provided or not adequately documented. Its admissions covered gaps during some or all of a member’s enrollment.

Where the failure was missing care, we examine what the member actually received. Where it was inadequate documentation, we examine how the plan recorded and maintained evidence of qualifying services. The admission expressly includes both paths.

The duration makes the problem sharper. In many instances, RiverSpring collected monthly payments despite a service or documentation gap lasting three or more consecutive months. For some members, the gap covered their whole time in the plan, as the Justice Department’s account of the admissions explains:

The whole enrollment. The government put the monthly payment at an average between $4,000 and $4,500 per member. We see the absurdity in paying a plan month after month while required care goes missing or the plan cannot show it happened. The members who went without care lost what Medicaid was paying for.

What Evidence Is Needed to Prove Fraud?

For a case like RiverSpring’s, the useful evidence connects the plan’s monthly payments to the member’s qualifying services, supporting documentation and enrollment status. We examine those records together, using the contract that governed the payments in question.

We compare the months paid with the member’s assessed need, the required services and the records of care delivered. We also examine why enrollment continued and how the plan responded when care or documentation was missing.

Care staff may know what happened with the services. Enrollment staff may know why a member stayed on the rolls. Compliance and payment staff may know how a documentation problem was raised and handled. Your view inside that process can connect decisions that sit in different records. Our work is to develop those connections into a False Claims Act case about the payments and the people responsible for them.

Why the Plan’s Own Conduct Matters

The financial incentives in Medicaid managed care make the plan’s own conduct central. A plan receives a fixed monthly payment and bears the cost of arranging covered care. Lower service spending can leave it with more of that payment.

The National Health Law Program’s 2015 guide, A Guide to Oversight, Transparency, and Accountability in Medicaid Managed Care, puts the incentive plainly:

The guide also explains why the state contract matters: many significant requirements and protections are established there. In RiverSpring’s case, the government tied the monthly payment to that contract’s qualifying-service and enrollment requirements.

A separate 1999 report from seminars sponsored by the Health Care Financing Administration, Controlling Fraud and Abuse in Medicaid: Innovations and Obstacles, identified a recurring confusion among state agencies. They blurred fraud committed against a plan with fraud committed by the plan. The report explained that a plan’s incentive to stop providers from taking its money says little about its own diversion of capitation away from healthcare delivery.

RiverSpring’s admissions concerned the plan’s receipt of monthly Medicaid money and its qualifying-service obligations. We follow that payment into the plan’s own decisions about care, records and continued enrollment. Taxpayers fund the arrangement so members receive care. The enrollment count is only the beginning of that account.

CenterLight’s Separate Capitation Settlements

CenterLight Healthcare’s separate settlements show how eligibility, service delivery and disenrollment can each affect a plan’s entitlement to capitation. Its January 2016 settlement included admissions concerning ineligible members associated with social adult day care centers. The plan continued seeking monthly payments after state guidance said attendance at those centers did not satisfy the enrollment standard.

In a separate resolution announced in March 2018, CenterLight admitted failures involving adult home residents who did not receive required community-based services. It also admitted failing to disenroll them promptly and inadequately overseeing the home care agencies responsible for their care.

The connection to RiverSpring is the monthly payment’s dependence on what happened behind enrollment. CenterLight’s later admissions add a useful point for plan employees: the service provider’s work and the plan’s oversight belong in the same account. A contracted agency may deliver the care, while the plan holds the enrollment and receives the capitation.

Can You Get Paid for Reporting Medicaid Fraud?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The whistleblower’s share comes from the recovery.

A plan employee’s account can reach beyond a missing service to the payment and the decisions that kept it coming. That is the connection we work through with you.

You Know What Happened After Enrollment

If you saw capitation continue through missing services or inadequate records, talk with our whistleblower experts about what happened inside your plan. We connect your knowledge of care and enrollment to the Medicaid payments, build your strongest Medicaid whistleblower case with you and bring in Medicaid managed care whistleblower lawyers who understand those obligations. We stay with you from the first conversation through the pursuit of a recovery.