Author: Pat Kelleher

The following Update was published in the National Association for Home Care, NAHC Report on May 7, 2015.  

A three-judge panel heard oral argument on Thursday at the US Court of Appeals in  DC  on NAHC’s challenge to the validity of new Department of Labor rules governing overtime compensation for “companionship services” and “live-in domestic services.” The case involves the government’s appeal of the federal District Court ruling that sided with NAHC and invalidated both rules that were scheduled to take effect on January 1, 2015. NAHC is joined in the lawsuit by the International Franchise Association and the Home Care association of America.

In the appeal, the Department of Labor (DoL) is represented by the US Justice Department. NAHC and its co-plaintiffs are represented by Maurice Baskin of Littler Mendelson and Bill Dombi, Director of NAHC’s Center for Health Care Law.

The judges expressed a great deal of interest in the DoL rule change affecting live-in services. It appeared the reason for their interest was two-fold. First, that rule had not been previously addressed by the US Supreme Court, in contrast to the Supreme Court ruling in a 2007 case brought by NAHC  challenging  union efforts to stop application of the “companionship services” overtime exemption with workers employed by home care companies. Second, the language in the law on live-in domestic services is different than the law on the companionship services exemption as to the power of DoL to “define and delimit” terms.

Both sides presented strong arguments on the case indicating that the matter presents complex and difficult issues of law. NAHC’s arguments focused on the impact of the rule change on consumers of home care and the rules’ complete eradication of the overtime exemptions in the face of congressional actions to retain it for nearly 40 years.  The DoL counsel argued that DoL has the power to fill definitional gaps in the law with respect to such terms as “companionship services” and which employees the overtime exemption applied to. That focus was intended to take advantage of standards of law that give deference to federal agency interpretations where the plain language of the law passed by Congress does not full provide the needed interpretation.

It is expected that the Court of Appeals will issue a ruling in the next two months as the Court goes on recess in July. In the event that NAHC is successful in defeating the government’s appeal, it can be anticipated that DoL will make an effort to gain review before the Supreme Court. NAHC and its partners are also committed to take all steps available to prevent the challenged rules from taking effect, including an appeal to the Supreme Court if needed. Stay tuned to NAHC Report for any developments in this important litigation.

This week as the entire health care community pauses to recognize the commitment, value and professionalism of our nation’s nurses, the Home Care Alliance would like to acknowledge the seven individuals who were recognized with Star Awards at our annual celebration in Boston on April 28th.  In the words of HCA of MA President Jeanne Ryan,  these seven individuals  “show us the breadth of what home care is at its best.”

The 2015 Star Award Winners are:

Clinicians of the Year:  Janet Fuller, RN Case Manager, Medical Resources Home Health, Newton, and Patricia G. Martin, RN, Hospice Nurse, Community Nurse & Hospice Care, Fairhaven

Aide of the Year:  Judith Clervil, Lead Certified Nursing Assistant, Residential Support Services, Inc., Chelsea

Manager of the Year:  Michelle Landry, Rehabilitation Manager, Brockton VNA, Brockton

Physician of the Year:  Cara Chevalier, MD, Medical Director, Hallmark Health VNA & Hospice, Malden

Legislator of the Year:  US Senator Elizabeth Warren

Home Care Champion:  Tim Burgers, Associate Director, Home Care Alliance of MA

Truly these individuals stand in for all the home care nurses, therapists, aides, physicians and managers who bring so much care and comfort to the ill and afflicted.

Congratulations to you all!  we will be proud to feature our Clinicians and Aide of the Year on the covers of our 2016 Resource Directories!

Pat Kelleher
Executive Director, HCA of MA

In what is certainly a cautionary tale to any in home care operating outside of federal regulation, comes this post from Attorney Paul Shaw of Verrill Dana, LLP on the sentencing Friday at the federal courthouse in Boston:

Michael Galatis, 63, a registered nurse, and the owner of At Home VNA (AHVNA), a home health agency located in Waltham, was sentenced yesterday in federal district court to serve 92 months in prison for fraudulently billing millions of dollars of services to Medicare and then laundering the proceeds.

In addition to the 92 month prison sentence, U.S. District Court Judge Douglas P. Woodlock ordered Galatis to pay a $50,000 fine, $7 million in restitution to Medicare, and to forfeit proceeds of the fraud scheme, including his house, valued at $850,000.  Galatis was convicted following a 16-day trial in December 2014 of conspiracy to commit health care fraud, ten counts of health care fraud, and seven counts of money laundering.  From 2006 to 2012, Galatis submitted more than $27 million in false and fraudulent home health care claims to Medicare.  Medicare paid AHVNA more than $20 million of those fraudulent claims.

The Medicare program pays for home health services only if the services are medically necessary and the individual is homebound.  Galatis ignored these requirements and trained AHVNA nurses to recruit healthy individuals with Medicare insurance who lived in large apartment buildings.  Galatis held “wellness clinics” at these buildings where nurses convinced senior citizens to enroll with AHVNA and have a nurse visit them in their home. Galatis trained AHVNA nurses to manipulate the patients’ Medicare assessment forms to make it appear as though the patients qualified for Medicare home health services, when that was often not the case.  Galatis paid a physician, Dr. Spencer Wilking, to sign the home health care orders, even though Dr. Wilking did not examine the vast majority of AHVNA’s patients.  Evidence at trial revealed the patients’ primary care physicians did not refer the patients to AHVNA and were unaware that AHVNA was sending nurses to see their patients in their homes.

The Office of the Inspector General and other federal entities continue to have a significant local presence when it come to examining Medicare and Medicaid fraud, most especially in home health care.  This update on a high profile local arrest comes from Boston attorney and health care compliance expert Paul Shaw, of the law firm Verrill Dana.

On December 3, 2014, following a 15-day trial, a federal jury convicted the owner of At Home VNA of Waltham, MA, Michael Galatis, R.N., for fraudulently billing millions of dollars of services to Medicare and then laundering the proceeds.  The jury also found that Galatis used portions of the proceeds of the fraud scheme to purchase a $750,000 house in Natick in 2010. Over the course of 14 months, Galatis purchased the house, and paid off a mortgage, in increments including $50,000 and in excess of $100,000, until he owned it free and clear of a mortgage. The jury’s finding renders Galatis’s home forfeitable.  In addition, the jury found that $50,000 contained in two bank accounts related to the fraud scheme is forfeitable.

From 2006 to 2012, Galatis caused At-Home VNA to submit more than $27 million in false and fraudulent home health services claims to Medicare.  Galatis, along with his clinical director, trained At-Home VNA nurses to recruit older patients on Medicare who lived in large apartment buildings. Galatis held “wellness clinics” at these buildings where nurses convinced senior citizens to enroll with At-Home and have a nurse visit them in their home. Galatis trained nurses to manipulate the patients’ Medicare assessment forms to make it appear as though the patients qualified for Medicare home health services, when that was often not the case. The home health orders were signed by At Home VNA’s paid medical director, Dr. Spencer Wilking, who has separately pleaded guilty to health care fraud.  At no time did the medical director actually examine any patient before signing the order for home health services.

The elderly patients’ primary care physicians were unaware that At Home was sending nurses to see their patients in their homes. A number of primary care physicians complained to Galatis and asked him to stop seeing the patients, but he ignored these complaints. Similarly, At Home VNA’s nurses asked Galatis if they could stop seeing the patients, because they did not need home health services, but Galatis refused these requests as well.

Sentencing in the case is scheduled for February 26, 2015.   The health care fraud statutes under which Galatis was convicted provide a sentence of no greater than 10 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or loss resulting from the offense, and restitution to the Medicare program.

Attorney Paul Shaw can be reached at (617) 274-2860
pshaw@verrilldana.com

CMS has delayed enforcement and penalties related to its new and controversial “two midnight rule. ” The deadline to begin enforcement of the rule had already been delayed from Oct. 1, 2013, to March 31, 2014 and is now being pushed back to September 30, 2014.

The final hospital rule, published last August, modifies and clarifies CMS’s longstanding admissions policy for payment purposes. The 2-midnight benchmark states that if the admitting practitioner admits a Medicare beneficiary as an inpatient with the reasonable expectation that the beneficiary will require care that “crosses 2 midnights,” Medicare Part A payment is “generally appropriate,” assuming medical record documentation justifies the admission.

The attempt to clarify admission rules was in part driven by beneficiary complaints about increased use, and length of, observation stays, which left some patients who went to nursing homes subject to surprise 20% copayments.

The AHA and the AMA have been lobbying strongly for a repeal or delay of the the new rule.  AHA questions CMS’s assertion that the new rule will bring in more revenue as hospitals will be able to bill full inpatient rates on cases that may have been outpatient in the past.

AHA has threatened litigation around the issue.