Visiting Nurse Service of New York: Accepting the Patient, Missing the Care

The 2020 VNSNY home health fraud settlement required Visiting Nurse Service of New York to pay $57 million to resolve allegations that it accepted patients it could not serve, failed to deliver physician-ordered health care, and billed Medicare and Medicaid using inaccurate service records. The whistleblower’s complaint described the problem from inside the agency: referral instructions, rehabilitation-delay reports, visit logs and aide billing that allegedly told a different story from the care patients received. If you work in scheduling, nursing, therapy or billing, those are familiar parts of the business. Here, they became the substance of a False Claims Act case.

VNSNY Home Care was the organization’s certified home health agency. A former vice president of operations improvement and integration brought the case, drawing on work that included finance and patient accounts. His amended complaint alleged that management knew about the service and billing problems and continued them. The allegations reached back to 2004.

Accepting Referrals Without the Staff to Deliver Care

The whistleblower alleged that VNSNY required staff to accept every referral even when the agency lacked capacity to provide the ordered services. The alleged financial incentive was straightforward: more patients meant more payments for episodes of care, while fewer delivered services kept the work down.

The complaint described a confrontation after sales executives told referring hospitals that VNSNY could not provide timely rehabilitation services and would have to limit referrals. A senior sales executive allegedly instructed a colleague to withdraw that message after the chief executive objected. The complaint quoted him:

That instruction matters because the alleged shortage was known before the next patient arrived. In another management discussion described in the complaint, a regional executive raised a referral for speech therapy that VNSNY had accepted despite having no available speech therapists to provide it.

The complaint also identified an internal rehabilitation-delay report covering approximately 5,000 referred patients. It alleged that 2,574 had not received the prescribed physical, occupational or speech therapy services. A report naming patients waiting for care is a very different view of the business from a count of referrals accepted.

We see the contradiction in the whistleblower’s account: VNSNY allegedly told hospitals to keep sending patients while its managers described care they could not supply. Saying yes protected the referral stream. The patient was left waiting for therapy.

The complaint described requests for anticipated payment at the beginning of an episode, followed by a final payment request. It described completed clinical assessments and an established plan of care as prerequisites to those anticipated payments. The whistleblower alleged that VNSNY sought those payments without disclosing that it lacked the capacity or intention to deliver a sizable portion of the ordered care.

The Plan of Care and the Visits That Followed

The plan-of-care allegations concerned the type, timing and frequency of care the physician ordered. The complaint alleged that VNSNY omitted visits and services, delayed the start of care, and changed what patients received without notifying them or obtaining the referring physician’s approval.

The home health certification chain connects the order and plan to the agency’s delivery of care and request for payment. The complaint’s point was that an agency could accept the patient and obtain payment while failing to provide the particular treatment prescribed. The complaint alleged that, in the patient cases it described, VNSNY neither obtained physician sign-off for its reductions nor disclosed the missing services in its anticipated or final payment requests.

In one patient example, the complaint put 27 rehabilitation visits and 38 nursing visits in the plan beside no rehabilitation visits and five nursing visits actually provided. It alleged that VNSNY nevertheless billed for and received $3,537 for that episode. The whistleblower’s account links the treatment order, missing services and payment to the same episode. That is the connection an agency-wide missed-visit total cannot supply on its own.

Visit Verification That Management Allegedly Ignored

The complaint alleged that VNSNY billed for nursing and rehabilitation visits that did not occur or did not last as long as the records claimed. It described a verification system requiring both a patient’s electronic signature on a tablet and a call from the patient’s phone. The system recorded the time of those events for auditing and reimbursement purposes.

According to the whistleblower, staff falsified time entries, forged patient signatures or bypassed verification, and management continued billing. The complaint identified visit reports showing appointments too close together to allow travel between addresses, visits too short to deliver the ordered care, missing signatures and missing calls.

The complaint put the agency’s own expected workload beside the recorded workload. It described an internal standard of roughly six visits per workday, then identified a nurse whose entries amounted to roughly 20 visits per workday throughout 2013. The allegation rested on the company’s own visit reports and working assumptions, including time for travel.

The financial incentive allegedly reached both the agency and the worker. The complaint said inflated visits and hours increased compensation for nurses and therapists, while VNSNY collected reimbursement for care that did not happen or differed from the reported service. For an insider who knows the routes and the work, those details can explain why a reported day could not have happened as recorded.

Aide Services Changed on the Way to the Bill

The aide-service allegations concerned task codes, payment from different programs and clinical supervision. The complaint said VNSNY obtained aide services through Partners in Care and outside providers, with aides entering task codes through the Santrax phone system.

Those codes distinguished personal care, such as bathing and dressing, from housekeeping tasks such as cleaning and laundry. The whistleblower alleged that VNSNY recoded housekeeping as personal care to obtain Medicare reimbursement, and sometimes billed Medicare even when the housekeeping code remained unchanged.

Medicare home health and Medicaid personal care have different coverage and authorization arrangements. That makes the actual task, service category and payer central to understanding an aide claim. The complaint went further than alleging a mistaken code. It alleged that VNSNY configured the reporting system for outside aide providers to require personal-care time before it would accept any time entry:

A required field can make a record look complete while forcing the worker to enter a service the patient never received. We would want to understand who chose that requirement and how the resulting entries reached billing.

Dual-Eligible Billing and the Choice of Payer

The complaint separately alleged improper billing for patients enrolled in both Medicare and Medicaid. It described instructions to allocate only two hours of aide time to Medicare and send the rest to Medicaid, exploiting the different payment methods then in use.

The whistleblower alleged that, after Medicaid moved to episodic payment, VNSNY continued allocating aide time disproportionately to Medicaid so it could collect full episode payments from both programs for the same service. The complaint quoted a senior population-health executive describing the instruction:

The alleged decision was about where to send the hours to increase payment. It connects the clinical entry to a billing instruction that a nurse, finance employee or billing specialist might recognize.

Supervision Was Part of the Care

Aide supervision adds a separate question to who is qualified to provide the service: who checked the care being delivered? The whistleblower alleged that VNSNY failed to provide required nursing or therapist supervision and identified internal reports tracking missed supervisory visits. The complaint described supervision as a way to check whether aides were meeting patients’ medical needs.

The Settlement and the Whistleblower Who Continued the Case

The United States and New York declined to join the case, and the whistleblower continued it. VNSNY agreed to settle the plan-of-care and billing allegations. The agreement allocated $50,160,000 to the federal government and $6,840,000 to New York.

VNS Choice and the Far Rockaway ACT Case

VNS Choice concerned managed-care enrollment and monthly Medicaid payments, a different transaction from the ordered home health visits at issue here. In its separate managed-care settlement announcement, the U.S. Attorney’s Office described admissions that members referred by or using social adult day care centers were ineligible for the plan, and that some centers did not provide qualifying personal care services.

The Far Rockaway Assertive Community Treatment settlement concerned services for people with serious mental illness. VNS admitted specified failures involving assessments, service plans, psychiatric-visit documentation and progress notes, including seeking full monthly payment when documented contacts supported only partial payment. We see an absurd bargain: the largest settlement of the three came with no admission about the missing care.

What Evidence Is Needed to Prove Fraud?

For the allegations in this case, the evidence connects the physician’s order, the agency’s ability to fulfill it, the care recorded and the payment requested. The complaint supplied unusually concrete examples of those connections: rehabilitation-delay reports, visit-verification logs, aide-task entries, supervisory records and management instructions.

An insider in home healthcare may know one part especially well. A scheduler may understand why a referral could not be staffed. A clinician may know what the patient actually received. A billing or systems employee may understand why a task code changed or how hours were assigned to a payer. We work with that knowledge to connect the service shortfall to the representations, decisions and payments that make the case.

How Much Does Medicare Fraud Whistleblower Pay?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Our whistleblower experts work with you to turn your knowledge of missing care and billing decisions into a case.

You Know Where the Care Went Missing

If you know why ordered visits disappeared, aide tasks changed or billing continued, talk with our whistleblower experts about what you saw. We build your strongest home health whistleblower case with you, bring in home health fraud whistleblower lawyers who understand clinical records and Medicare and Medicaid billing, and stay beside you through the case.