HOME HEALTHCARE COMPANY SETTLES WITH ATTORNEY GENERAL'S OFFICE OVER MEDICAID FRAUD ALLEGATIONS

Attorney General J. Joseph Curran, Jr. announced today that Tender Loving Care Health Care Services, Inc. has agreed to pay approximately $1.3 million in connection with allegations that the former manager of its Maryland franchise operations knowingly caused Medicaid to overpay the company for its services. TLC provides home nursing and other healthcare services throughout the Baltimore-Washington Metropolitan area, as well as in 20 other states and the District of Columbia. Its headquarters are in Lake Success, New York.

TLC, which has offices at 1501 South Edgewood Street in Baltimore County and at 8121 Georgia Avenue in Prince George's County, agreed to refund overpayments of $556,769 and to pay additional damages and costs of $741,769 in order to settle allegations that it defrauded the state's Medicaid program.

An investigation by the Attorney General's Medicaid Fraud Control Unit revealed that for the fiscal years beginning March 1993 and ending February 1997, the former manager of TLC's Maryland franchise repeatedly submitted payroll reports to TLC's headquarters that inflated the number of employees who were performing healthcare-related duties. TLC then submitted documentation based on the manager's information to Medicaid. As a result, Medicaid significantly overpaid TLC for its personnel costs.

The investigation revealed that many of the supposed TLC employees fraudulently added to the payroll reports were actually employed by other, unrelated companies owned by the former manager. In other cases, the manager added the names of employees of the District of Columbia TLC franchise, which he also previously managed, to the Maryland franchise's reports.

Under the settlement agreement, TLC will refund to Medicaid all overpayments resulting from the fraudulent actions. TLC will also pay the state an additional amount equal to the cost of the fraud, as well as compensation for the costs of the investigation. TLC asserts that it had no knowledge that the information provided to it by the former manager of its Maryland franchise was incorrect in any way. The settlement agreement itself is not an admission or evidence of wrongdoing by TLC.

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