Two Brooklyn-based home health agencies will pay out a multi-million dollar wage theft settlement negotiated by New York Attorney General Letitia James and the U.S. Attorney for the Eastern District of New York.
Midwood-based Edison Home Health Care and Preferred Home Healthcare in Mapleton will pay $7.5 million in unpaid wages to workers and $9.75 million to Medicaid, following allegations that they withheld benefits from home health aides, many of whom are immigrant women or women of color, from 2012 to 2020.
“Home health aides provide crucial care to our most vulnerable neighbors and loved ones, and they deserve to be paid for their hard work,” James said in a statement. “Edison and Preferred cheated employees out of years of pay and cheated New York taxpayers by defrauding Medicaid for their own benefit. This is a tremendous victory for our ongoing efforts to protect hardworking New Yorkers’ rightfully earned wages.”
The settlement stemmed from whistleblower complaints filed under the New York and federal False Claims Acts. According to court documents, the facilities filed false Medicare claims and violated the Wage Parity Act — which states that facilities cannot receive government funds if they are paying healthcare workers less than a set minimum wage. Instead of using the money to pay workers, as is required by law, the facilities allegedly used it to purchase medical stop-loss insurance.
The investigation also uncovered that individuals and entities connected to Edison and Preferred received millions in dividend payments from the stop-loss insurance. Despite this, the companies continued to request and receive Medicaid payments for services provided by home health aides, all while falsely claiming they were adhering to the Wage Parity Act.
Under the settlement, the companies will also revise policies, undergo training, and report wage compliance to the attorney general’s office for three years.