(This story has been updated with a July 14 statement from Affinity)
Two senior living providers are targeted in a lawsuit alleging they defrauded the U.S. and the state of North Carolina out of more than $60 million.
That’s the gist of the suit, which was recently unsealed and claims that the senior living operators intentionally submitted false Medicaid claims for reimbursement through the state starting in at least 2010.
The lawsuit names Meridian Senior Living and 45 adult care homes throughout the state of North Carolina, as well as the provider’s management and billing entities and principal owner. The suit also names Affinity Living Group, which split off from Meridian in 2016.
Both Affinity and Meridian are based in North Carolina, and Meridian owns or operates communities in 20 states.
According to the suit, Meridian’s senior living properties were not staffed with enough workers to provide the services required for residents within “Special Care Units,” which are defined as facilities designed for people with Alzheimer’s disease or other kinds of dementia. Despite the staff shortage, the facilities still allegedly billed North Carolina Medicaid the maximum allowed each month, regardless of when residents were admitted, discharged or diagnosed.
Furthermore, the providers knowingly charged the government for more hours of personal care work than their employees were able to provide, the suit alleges.
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If true, the claims could mean the providers violated the False Claims Act, a federal law used to combat fraud against the government.
But Affinity called the suit “frivolous” in a July 14 statement.
“We categorically deny and reject the claims in this lawsuit,” said Charles Trefzger, President of Affinity Living Group, in the statement. “The lawsuit is an erroneous interpretation of Medicaid reimbursement law in the State.”
Affinity has undergone a dozen audits over the past few years by the North Carolina Department of Health and Human Services, all of which “upheld our interpretation of regulations and billing guidelines for Medicaid,” Trefzger stated.
“Assisted living providers are reimbursed by Medicaid based on the services performed, not the amount of time it takes to provide those services. Therefore, providers can only bill up to the approved amount based upon a resident’s independent assessment and care plan,” the company noted in its statement. “Once the provider has billed the pre-determined amount in a given month, the state will not pay any additional amount for that resident.”
Written by Tim Regan