'Spry spy' leads Medicaid facility fraud sting

A long investigation by New York's Medicaid fraud control unit led to four arrests and a $6.5 million settlement with Brooklyn's Northern Manor Adult Day Health Care Program, according to an announcement by state Attorney General Eric T. Schneiderman.

The facility allegedly filed more than $1 million in inappropriate Medicaid claims and falsified medical records to justify them. Further, the government accuses Northern Manor of hiring unlicensed staff to provide social work services and assess and diagnose beneficiaries, the announcement stated. Patient safety risks stemming from use of unlicensed providers in fraud scams have become a growing concern, FierceHealthPayer: AntiFraud previously reported.

Instrumental in the government's case was "a spry, sly spy"--a senior citizen described as healthy and vibrant--who infiltrated Northern Manor, posing as a patient and filmed the alleged crime, The Brooklyn Paper reported. Employees fudged the mole's medical admission forms to ensure that he qualified for services he was too healthy to need. The staffer who conducted his intake evaluation, The Paper noted, recorded that the man couldn't do laundry and suffered from insomnia, though he reported washing clothes and sleeping well.

Northern Manor's parent company agreed to pay $6.5 million to settle a separate civil lawsuit related to running the facility without a qualified social worker on board and admitting more patients than the program was certified to accept, the AG's office noted. The facility will close as soon as the state approves a shut-down plan, the New York Daily News reported.

"Today's charges detail yet another example of egregious, despicable abuse of public resources for personal gain," Schneiderman said in the announcement, "sending the message that criminal behavior will be met with the full force of the law." 

Northern Manor's program director Gelena Deverman faces a maximum sentence of 25 years in prison for Medicaid fraud. She pleaded not guilty. Another employee faces a felony charge of unauthorized practice of a profession, while two other staffers are accused of falsifying records, The Daily News reported.

For more:
- here's Attorney General Schmeiderman's announcement
- see the New York Daily News article
- read The Brooklyn Paper article