New York Attorney General Letitia James has announced a significant settlement with Fidelis Care, a managed care organization, requiring them to pay back over $7.6 million to the Medicaid program. This action comes after Fidelis Care failed to properly vet a contracted provider, Cornerstone Herkimer, LLC, leading to vulnerable Medicaid patients in Central New York receiving treatment from an unlicensed individual.
The provider in question, Ward Halverson, a Licensed Clinical Social Worker and owner of Cornerstone Herkimer, had been excluded from the Medicaid program in 2017 following a misdemeanor conviction for endangering a child. Despite this exclusion, Fidelis Care continued to bill Medicaid for services provided by Halverson’s company between February 2019 and July 2021. This breach of duty put vulnerable patients at risk and resulted in substantial financial penalties for Fidelis Care.
Attorney General James emphasized the importance of due diligence by healthcare insurers. “New Yorkers should be able to trust that the doctors and health care providers their insurers use are properly licensed and will treat them responsibly,” she stated. “When companies fail to do their due diligence, patients are at risk of being treated by providers who may be unlicensed or unsafe. This settlement sends a clear message that insurers, like Fidelis Care, will be held accountable if they do not ensure those in their networks are legally allowed to treat vulnerable Medicaid patients.”
Breakdown of the Fidelis Care Settlement
The settlement mandates that Fidelis Care repay $7,681,796.44 to the state Medicaid program. In addition to the financial restitution, Fidelis Care is obligated to implement systematic checks to verify the status of all contracted providers against federal and state exclusion lists. This rigorous review process is designed to identify and terminate any prohibited relationships with providers excluded from Medicaid, ensuring future compliance and patient safety.
The Case Against Cornerstone Herkimer and Ward Halverson
Ward Halverson’s history reveals a concerning pattern of misconduct. He initially contracted with Fidelis Care in 2013 to provide Medicaid-reimbursed services. However, in 2014, he pleaded guilty to Attempted Endangering the Welfare of a Child, a misdemeanor offense. Consequently, his license was suspended for 12 months by the New York State Office of Professional Discipline, starting January 10, 2017. By May 2017, Halverson was officially excluded from the Medicaid program.
Despite these red flags and his formal exclusion, Fidelis Care continued to process payments to Halverson’s company, Cornerstone Herkimer, for over two years. This oversight directly violated state and federal laws, as well as Fidelis Care’s own contract with New York state, all of which require managed care organizations to routinely check exclusion lists and terminate relationships with prohibited providers.
Attorney General Letitia James’s press release about the settlement with Fidelis Care, addressing Medicaid provider fraud.
Attorney General James’s Commitment to Healthcare Integrity
This settlement with Fidelis Care is part of a broader effort by Attorney General James to combat fraud and protect patients within the healthcare system. Several recent actions underscore this commitment:
- March 2024: Secured $8.6 million and reforms for Fulton Commons nursing home after financial fraud and resident mistreatment.
- November 2023: Announced a guilty verdict for a New York doctor involved in a kickback scheme defrauding Medicaid, subjecting patients to unnecessary invasive procedures.
- October 2023: Sued Fresenius Vascular Care for performing unnecessary surgeries on vulnerable patients.
- September 2023: Recovered over $3 million from a health care company engaged in an illegal kickback scheme.
- February 2023: Obtained over $7.1 million from a former nursing home due to years of fraud and resident neglect.
- September 2021: Announced the indictment of a Medicaid fraud ringleader who endangered hundreds of patients, many living with HIV.
These cases highlight the Attorney General’s proactive approach to ensuring healthcare providers and insurers adhere to ethical and legal standards, safeguarding vulnerable populations from exploitation and harm.
Reporting Medicaid Fraud
The Medicaid Fraud Control Unit (MFCU) is dedicated to protecting the public by investigating and prosecuting Medicaid provider fraud and instances of abuse or neglect in nursing homes. Individuals with information regarding Medicaid fraud or resident mistreatment are encouraged to file a confidential complaint online or call the MFCU hotline at (800) 771-7755. In emergency situations, the public is advised to call 911.
A call to action encouraging the public to report Medicaid provider fraud through the Attorney General’s online portal.
Conclusion: Accountability and Patient Protection
The settlement with Fidelis Care serves as a critical reminder to all healthcare insurers about their responsibility to thoroughly vet and monitor their provider networks. Failure to comply with regulations not only results in financial penalties but also jeopardizes the health and well-being of vulnerable patients relying on Medicaid services. Attorney General James’s ongoing efforts demonstrate a clear commitment to holding healthcare organizations accountable and ensuring a safe and trustworthy healthcare system for all New Yorkers.
