Compassionate Homecare to Pay $6.5M to Resolve Fraud Allegations

BOSTON (March 29, 2022)—Massachusetts Attorney General Maura Healey announced that home health agency Compassionate Homecare, Inc. has agreed to pay $6.53 million to MassHealth to resolve allegations that it billed MassHealth for services that were not authorized by a physician. In addition, up to $375,000 will be set aside for payment of unpaid wages for former Compassionate employees.

The settlement, which has been approved by the United State Bankruptcy Court, resolves a lawsuit filed by the AG’s Office against Compassionate in March 2018 alleging that the company stole millions of dollars from MassHealth.

“This settlement is a victory for MassHealth and for workers who deserve to be paid back for missed wages,” said AG Healey. “We will continue to protect the integrity of our MassHealth program and ensure compliance with our wage and hour laws.”

Compassionate was formed as a home health agency in 2010. In June 2017, the AG’s Fair Labor Division issued three citations against Compassionate totaling $646,714 in restitution and penalties for failure to pay timely wages and overtime to its employees, and failure to keep true and accurate payroll records.

MassHealth provides health care products and services to eligible low-income individuals, including people with disabilities, children and senior citizens. The program pays for three kinds of home health services for eligible members: nursing, home health aide and therapy. To bill MassHealth for home health services, the member’s physician must review and sign a plan of care certifying that home health services are medically necessary. Home health agencies are required to maintain updated medical records of services provided to each member for at least six years.

In September 2019, Compassionate and its owner, Francis Kimaru, pleaded guilty to separate criminal charges brought by the AG’s Medicaid Fraud Division. As part of that plea, Compassionate and Kimaru admitted to stealing hundreds of thousands of dollars from MassHealth by routinely overbilling and falsely billing for services that were not authorized or provided to patients. Compassionate filed for bankruptcy in May 2020.

Under the terms of this settlement, MassHealth will receive $6.53 million. The settlement agreement also provides that up to $375,000 will be prioritized for distribution by Compassionate’s bankruptcy trustee to the former employees who are owed unpaid wages by Compassionate as part of the company’s bankruptcy proceedings.

These matters were handled by Deputy Division Chief Kevin Lownds, Assistant Attorney General Matthew Jones, and Senior Health Care Fraud Investigator Christine Barker of the Attorney General’s Medicaid Fraud Division; Deputy Division Chief Christina Chan of the Attorney General’s False Claims Division; Assistant Attorney General Amy Goyer of the Attorney General’s Fair Labor Division; and Division Chief Timothy Casey of the Attorney General’s Constitutional and Administrative Law Division. MassHealth provided substantial assistance in the Medicaid Fraud Division’s investigation and litigation.

The Medicaid Fraud Division of the Massachusetts Attorney General’s Office receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award. The remaining 25% is funded by the Commonwealth of Massachusetts.