The Sick Looting of Home Health Care

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

But earnings soared. Excellent reported $93.2 million in revenue, most of it via Medicaid, from 2007 to 2008. Gross profits were $23 million, with its two partners taking home $4 million apiece.

As one health care entrepreneur who watched them harvest this outrageous fortune put it, "They hit the lottery."

We'd be unlikely to know about Excellent's adventure if not for the death in 2007 of Joseph Goldberger's father-in-law, a man named Jeno Guttman.

The partners sought to re-divide the pie: Goldberger's wife, and a business associate would get the biggest shares, 30.75 percent each. Landa's new cut was 20 percent, with 13.5 percent for his lawyer, a busy political fundraiser from Long Island named Howard Fensterman. Five percent was to be purchased by another lawyer named Joseph Treff, who had been cited in a major mortgage fraud case.

There were just two problems: One was that the Public Health Council had to approve the new owners. The other was that Excellent had also come under investigation by Cuomo's "Home Alone" probe, the same inquiry that had brought down their former landlord. The application was put on hold until this was resolved.

More problems surfaced when the media got wind that Fensterman, Landa's attorney, was lining up contributions for Cuomo's campaigns. Both the Voice and Newsday reported that Cuomo had received donations from partners in a company under investigation. The campaign quickly returned $6,000 from Landa. Fensterman said his own donations were fine, since he was no longer seeking to become a partner. Actually, he simply had his wife, Lori, replace him as a would-be shareholder.

In December, Excellent settled the "Home Alone" charges, agreeing to a $3.7 million payment. There was no admission of wrongdoing, but prosecutors also did not withdraw their allegation that Excellent had known exactly what it was doing when it employed uncertified health aides.

The important part, however, was that the investigation was behind them, and the partnership agreement was resubmitted to the council. State officials were eager to help. In an executive summary recommending approval of Excellent's application, the "Home Alone" settlement was described as a win for the rogue home care agency: "The investigation concluded that Excellent had unintentionally used uncertified aides," bureaucrats wrote. This fabrication was repeated a few pages later: Excellent had "unknowingly" billed Medicaid for the bogus aides.

Asked last week who concocted this sham story, officials refused to say. "It was a mistake," a health department spokesman insisted. "It's been corrected."

But the company's default was harder to hide. The application came up for approval at the August 31 meeting of the Public Health Council. Again, members had to wait for someone with a vested interest to exit the room. This time, it was Fensterman, who was appointed to the council by Governor Paterson in June 2008.

"This is presented as a change in ownership," began Susan Regan, the attorney who had worried aloud back in 1998 about the company, "but we are seeing a number of very disturbing things."

She cited Excellent's failure to serve the special-needs patients it was licensed to help, plus its many missing reports. She also noted how it had soared past its estimated number of patients. It had even ignored a requirement to handle charity cases.

"Their actual operation is not only nothing like what they projected," said Regan, "but nothing like what they committed to do."

Health department officials responded that Excellent and other special needs agencies had been warned to shape up. A lawyer for the company, Jerome Levy, added that his client was "making a diligent effort to improve."

Regan wasn't satisfied. "It's pretty apparent they were just trying to get a full-service CHHA up and running," she said. "I think that was their intention from the beginning." It wasn't enough to reject the application, she said. "I want to revoke this license."

This brought gasps. This is not how officials usually talk, even private citizens designated to serve on review boards. "I can't think of a more extreme example," persisted Regan. "It was essentially a fraud."

In that case, health department officials said, the matter should probably be kicked down the road for the next governor to handle. "The whole issue of home health care in the state is ripe for reform," said the state's director of long-term care, Mark Kissinger. "We'll see if the next governor wants to take this on."

This month, the odds-on favorite to be the next governor was out in Williamsburg trolling for votes. Andrew Cuomo made several stops in the Orthodox community. At one point, he found himself seated at a long table surrounded by prominent local residents. One of them gestured toward two bearded men sitting next to the Attorney General. "And, of course, you know the two Josephs," he said, as Joseph Goldberger and Joseph Menczer smiled and nodded hopefully in Cuomo's direction.

trobbins@villagevoice.com

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