The Sick Looting of Home Health Care

A connected company's license to loot—at the expense of the taxpayers, elderly, and infirm

All these candidates insisting they can clean up Albany should take a good look at the case of a truly stubborn taxpayer leech to see what they're up against: The culprit is a Brooklyn-based firm misnamed Excellent Home Care Services, and it has been happily pillaging state coffers for years without interference.

So far, the finger-pointing in this season of outrage has focused on crooked politicians and public employees whose pensions we envy. The case of Excellent Home Care falls into a much larger category of abuse: the routine looting of public resources by those who prosper regardless of who's in office.

The story starts in 1994 when a group of wealthy health care moguls put all their chips down on the Republican candidate for governor, George Pataki. Leaders of this push included a nursing home tycoon named Benjamin Landa and a pair of wily operatives out of Williamsburg's Orthodox Jewish community named Joseph Menczer and Joseph Goldberger. They raised some $500,000 for Pataki's campaign, the kind of support that cements deep friendships.

They quickly presented the new governor with a list of favors sought. One had to do with the business of supplying home care attendants for the elderly and infirm.

We pause here for a necessary dose of health care policy. The home care idea is simple: Why pay for a hospital bed when nurses and aides can visit homes, thus reducing the burden on hospitals and clinics?

This notion worked so well that home care costs skyrocketed once unscrupulous for-profit companies recognized their earning opportunities. Patients needing a few hours of care could be served all day long; even better, around-the-clock. Who cared? The government was paying.

In his last year in office in 1994, Mario Cuomo's administration slapped a moratorium on all new home care licenses (in health care babble, they are CHHAs—pronounced "cha's"—for Certified Home Health Agency).

This greatly inconvenienced the health care tycoons. They convinced their new best friend, George Pataki, that the moratorium hurt needy New Yorkers, especially those developmentally disabled or mentally retarded. The administration agreed to authorize a small group of new home care agencies (CHHAs—remember?) to serve these special-needs patients. How could you be against that?

This is how Excellent Home Care came to be, and if its operators told a single word of truth about their actual intentions, it does not appear in any record. From the start, many suspected that the new agencies were just a way to get back to making huge profits off Medicaid and Medicare. This concern was raised at an October 1998 meeting of the state's Public Health Council, a panel of medically savvy citizens whose approval is required for new licenses.

Before Excellent's application was discussed, they had to wait for a new member to step outside. This was Benjamin Landa, an appointee of his friend the governor and the proud co-owner of the company, along with Joseph Goldberger's elderly father-in-law.

Once Landa had excused himself, the chairperson of the council's Establishment Committee, health care attorney Susan Regan, raised concerns. "There is always the danger that the special-needs CHHAs might serve as a way around the moratorium," she said, transcripts show.

Heads nodded around the room. A state health official agreed that "an end-run around the moratorium" was possible. Strict monitoring and annual reviews would close any loopholes, he said. With this assurance, the license was approved.

Excellent didn't get around to opening until 2004. It's unclear why, but it's worth noting that the company's original landlord was a Williamsburg firm also in the business of supplying home nursing aides. A probe by Attorney General Andrew Cuomo—dubbed "Operation Home Alone"—later found that Excellent's landlord, Immediate Home Care, had routinely used untrained aides with bogus state certificates. The owners eventually pled guilty to defrauding Medicaid of $12 million.

Excellent distanced itself by moving a few blocks away. Its first report in 2006 showed 780 patients. Of these, less than 20 percent were disabled. The rest were "general population" patients receiving standard assistance. As far as complying with the rules, this was the company's high-water mark.

Over the next three years, Excellent skipped its reports. The state also never asked, let alone audited its performance. It presumably didn't hurt that Excellent's brain trust—in the best Permanent Government tradition—had now become fervent supporters of Democrat Eliot Spitzer's 2006 bid for governor. Menczer and Goldberger, whose Albany shenanigans earned them the title of "the Two Josephs" during the Pataki years, again raised funds, and rallied the Orthodox community. On election night, they were on the VIP side of the red velvet rope hailing Spitzer's victory. At his inauguration, they stood on the statehouse steps applauding.

Meanwhile, Excellent hit its stride. Its original application had assured the state that it wouldn't be a budget-buster, limiting its work to 2,600 annual visits by skilled nurses, and 30,000 by health care aides. That was just talk. In 2008, records show, Excellent billed the state for more than 10 times that amount: 103,400 skilled nurse visits and 338,000 trips by health care aides.

Its mission to serve only disabled New Yorkers was another laugher. In 2008, this needy group accounted for less than 5 percent of its patients; in 2009, just 3 percent.

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