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AGREEMENT AND SETTLEMENT
AGREEMENT reached the 27th day of February, 1998, by and between the STATE
OF NEW YORK (hereinafter the "STATE"), by the Office of the Attorney General,
Medicaid Fraud Control Unit, and U.S. HOMECARE, CORPORATION. (For purposes of
this Agreement, U.S. HOMECARE, CORPORATION, hereinafter "USHC", is understood to
refer to the corporation, and its affiliates and subsidiaries, but not to any
individual officer, director, agent or employee.)
WHEREAS, USHC, a corporation with headquarters in Hartford, Connecticut,
operates six licensed home health agencies in New York State, all of which
agencies were enrolled in the Medicaid program as providers of personal care
services to Medicaid recipients during the period 1992-1997; and
WHEREAS, the Medicaid Fraud Control Unit conducted an audit comparing
USHC's Medicaid rates to the rates USHC charged the general public for personal
care services during the period 1992-1997, and thereafter contended that USHC
received reimbursements from Medicaid at rates higher than the rates charged the
general public, in violation of 18 NYCRR 505.14; and
WHEREAS, as a result of receipt of such reimbursements the Medicaid Fraud
Control Unit contends, USHC received overpayments from Medicaid; and,
WHEREAS, the STATE and USHC have agreed to resolve the issues raised by
the audit.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
set forth herein, the STATE and USHC agree as follows:
FIRST: The STATE represents that it has the authority to enter into this
settlement and to effectuate a final resolution with regard to the alleged
Medicaid overpayments on behalf of New York State and those counties of the
State that participated in making said payments to USHC.
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It is understood that USHC is entering into this Agreement in reliance on this
representation.
SECOND: USHC agrees to remit to the STATE the sum of $1,750,000, in an
initial payment of $100,000 to be made upon full execution of this Settlement
and Agreement on or before February 27, 1998, and subsequent installment
payments in the amounts and on the schedule defined in the Schedule of Payments
annexed hereto and made a part hereof. Interest shall be calculated at nine (9%)
commencing on the date of this Agreement and shall be increased a percentage
point on January 1, 1999, and an additional percentage point on January 1, 2000.
USHC may prepay the entirety of this amount without penalty or interest. USHC
further agrees to use reasonable efforts to prepay, in part or in full, the
unpaid balance at any point USHC refinances its senior lender indebtedness with
any third party lending institutions. Upon the signing of this Agreement, USHC
shall also provide a Promissory Note in commercially acceptable form. USHC
agrees its repayment obligation under this Agreement is a non-dischargeable debt
for purposes of 11 U.S.C. Sections 523 and 1328.
THIRD: USHC has entered into this Agreement solely for the purpose of
avoiding the burdens and expense of protracted litigation. The making of this
Agreement is not intended, and shall not be construed as an admission that USHC
has violated any law, ordinance or regulation. USHC maintains, and the STATE
does not dispute, that it has not knowingly billed incorrectly, knowingly
received any payments in excess of those to which it was entitled or engaged in
any unacceptable practices within the meaning of 18 NYCRR 515.2. The STATE
agrees that it shall take no action to affect, alter or modify USHC's status as
a provider in the Medicaid program by reason of this Agreement.
FOURTH: In consideration for USHC's payment, the STATE agrees to accept
that
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payment in full satisfaction of all claims the STATE could bring against USHC
for recovery of Medicaid payments or other damages arising from: USHC's
reimbursement for personal care services at a rate higher than that charged to
the general public during the period 1992-1997; and, USHC's submission of cost
reports pertaining to cost years 1990-1995.
FIFTH: The State further agrees that USHC shall have no further liability,
administrative, civil or criminal, for the communication of general public
charge information to the State of New York during the period 1992-1997, and the
submission of claims and receipt of reimbursement at rates higher than those
charged to the general public, during the period 1992-1997.
SIXTH: USHC and the STATE agree that this settlement shall preclude all
retroactive rate adjustments by the STATE for the period 1992-1997, except for
any amount constituting a retroactive rate adjustment pertaining to the
Westchester County operations of USHC for the period September 1, 1996 through
December 31, 1996.
SEVENTH: The STATE and USHC agree that each shall have the right to issue
press releases regarding this Agreement, but that any such press releases shall
be confined to the terms defined by this Agreement.
EIGHTH: USHC agrees to institute a compliance protocol with regard to the
appropriate identification of charges to the general public at all branches of
the corporation and the reporting of such information to all agencies of State
and local government. Formulation and implementation of such protocol shall be
conducted subject to approval by the STATE, and the STATE shall have the right
to review USHC's conformity with its compliance program. USHC will continue to
apply its Code of Ethics and Standards of Business Conduct and instruct all
levels of management in accordance therewith.
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NINTH: This constitutes the complete and full agreement reached by the
STATE and USHC, and may not be changed in any respect, except by a writing duly
executed by the parties or their authorized representatives.
WHEREFORE, the parties have read the foregoing Agreement and accept and
agree to the provisions contained therein and hereby have caused this Agreement
to be signed as of the day and date adjacent to their signatures.
AGREED TO:
US HOMECARE CORPORATION STATE OF NEW YORK
OFFICE OF THE ATTORNEY GENERAL
MEDICAID FRAUD CONTROL UNIT
By:__________________________ By:________________________________
Sworn to before me this
_____ day of February, 1998
_____________________________
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