Anthony Szczygiel (Buffalo) achieves $11 million settlement in nursing home fraud case
As many as 20,000 nursing home residents, the vast majority of whom may now be deceased, will be reimbursed through a federal court settlement approved by Hon. John Curtin. The settlement, reached Dec. 28, resolves Conrad v. Perales, a class action filed in 1992 on behalf of thousands of New York nursing home residents. Curtin, senior judge of the U.S. District Court for the Western District of New York, approved creation of an $11 million fund to reimburse residents who were defrauded by having to pay Medicaid co-pays even though they were eligible for Medicare. The thing about this case is, the state was an active participant in the fraud. In fact, the author of the fraud was a state program that (allowed for) the double billing and collection of funds of poor people,” said lawyer Henry Killeen III of Killeen & Killeen, lead litigation counsel for the plaintiffs, referring to the Medicare Optimization Program (MOP II) created by the New York State Health Department in 1989. Because the state Medicaid program, which primarily provides custodial care, is considered the “payer of last resort,” nursing home residents must forward all their income, including Social Security benefits and pensions, to the facility they live at. However, seniors who qualify for Medicare, which usually involves specific medical care, can keep their income, and Medicare will cover their nursing care in full. MOP II required nursing homes to bill both Medicaid and Medicare on behalf of nursing home residents. Homes would keep the proceeds from whichever program paid higher benefits — usually Medicaid — and send the remaining benefits, usually Medicare, to the state. Federal law, however, requires nursing homes to accept Medicare reimbursement in full satisfaction of a patient’s covered services. It is believed that thousands of New Yorkers in nursing homes may have been affected. The double-billing was discovered by Anthony Szczygiel, an attorney at Legal Services for the Elderly, Disabled or Disadvantaged of Western New York Inc. who is also a professor at the University at Buffalo Law School, where he heads the elder law clinic. Szczygiel filed a class-action lawsuit against the New York State Health Department in 1992 contending that the state did not abide by federal requirements to refund the victims.