New York, Federal Officials Begin Investigating Homes for Mentally Ill Adults

U.S. Attorney's offices in Manhattan and Brooklyn are investigating reports of fraudulent conduct by operators and health care providers at homes for adults with mental illnesses in New York City, the New York Times reports. The investigation, which follows a three-part Times series on the poor conditions in the state's adult homes, will focus on whether home operators and providers defrauded federal aid programs, "siphoning off" funds that should have paid for resident care, (Levy, New York Times, 5/1). In the series, the Times reported that inappropriate billing practices were used at almost all of the 26 homes the newspaper investigated. Some operators set up side businesses, such as van services that residents were required to use to go to clinics or doctors' offices, and also contracted with providers who performed unnecessary procedures, which were then billed to Medicare or Medicaid (Kaiser Daily Health Policy Report, 4/30). Mark Amodeo, a spokesperson for the Empire State Association of Adult Homes and Assisted Living Facilities, the state's trade group for adult homes, said of the Times series, "We were shocked by what we read, and saddened. ... We were aware that there were problems in some of these residences, however not to the degree that we read about in the paper" (Benjamin, Albany Times Union, 5/1). The group called on the state to increase funding for the facilities, which currently receive $28 per resident per day.

Defending Their Oversight
New York Gov. George Pataki (R) defended the state's oversight of the homes, saying that his administration has been "focusing" on the facilities and had increased the number of home inspections (New York Times, 5/1). In 2001, the state investigated 560 complaints at adult homes and issued 181 violations, which state Health Commissioner Antonia Novello called a "success story" (Albany Times Union, 5/1). Pataki on April 30 announced "emergency regulations" calling for adult homes to report all deaths of residents to the state. In addition, Pataki said he recently introduced legislation that would prohibit hospitals from discharging patients to homes accused of major violations and would increase fines for violations (New York Times, 5/1). Novello said at an April 30 General Assembly Health Committee hearing that the state has been working "diligently" to address the conditions in adult homes, but added, "It's difficult to immediately erase problems that have been here for 30 years." Novello said that the state Department of Health would establish a working group to make recommendations on the homes. She added that these new regulations were not a "knee-jerk reaction" to the Times articles (Albany Times Union, 5/1).