RALEIGH — Medicaid officials say a Raleigh company overcharged the state more than $824,000 for in-home personal care services meant for poor and disabled people who in many cases never received or didn't qualify for the care.
State regulators want to recoup that money, plus fines and penalties that raise the total to $926,000, and have started the process of pulling the license from Royal Healthcare Inc., which operates out of a single family home at 4124 Viewmont Drive, off Rock Quarry Road.
Division of Medical Assistance spokesman Brad Deen said the investigation comes at the leading edge of intense state scrutiny of personal care services companies, as the state invests in high-tech modernization of its decades-old billing systems. Using old-school methods of poring over printouts and checking complaints, Medicaid investigators found overpayments to Royal Healthcare in about 100 recipients' cases. Of those cases:
More than 90 failed to meet minimum qualifications for the services;
Only a handful had a doctor's order for the care;
And, 71 cases appeared to use a form that was recopied multiple times regardless of the recipients' individual situations.
For instance, each of the forms, although filled out for different recipients, said the person needed help with walking on Mondays and Tuesdays only, something that might make sense in one particular case but would be highly unlikely in all 71, Deen said. The repetitions were a "red flag," he said.
Headed by Raleigh resident Charles Fowowe, who denies any wrongdoing, Royal Healthcare has billed the state more than $2.4 million since 2005 for sending aides to people who need help with daily life activities - such as eating, bathing and using the bathroom.
"We shall refund all the money that they paid for the services of those patients," Fowowe said Friday. "All the patients received care."
According to the company's most recent license application, it serves 44 clients in Wake County as well as dozens more in Durham, Nash and other counties. The company was first notified of billing problems late last year and had not filed a response by a deadline of last week, state officials said.
In-home services debate
The action against Royal Healthcare comes at a time of hot debate about the in-home services. The state pays private companies to send aides to the homes of people who qualify by needing outside help with at least two daily activities, such as eating or bathing.
The industry, which serves more than 30,000 people, is making its case in court and to legislators about the services' value to thousands of North Carolinians, some of whom could wind up in long-term care without the help. The Association for Home & Hospice Care of North Carolina has contested a state-commissioned survey which called into question as much as 40 percent of PCS payments.
Royal Healthcare is not a member of the industry group.
State legislators voted in 2009 to cut $100 million from in-home personal care services during a two-year period, but the industry successfully asked an administrative judge to stop the state from cutting the benefits based on examining records instead of using in-home visits, as legislators had specified. Meanwhile the state, having overspent the $185 million budgeted to last the program through June, is planning more aggressive, technology-fueled efforts to hunt for millions in cuts by locating unnecessary services in those provided to older people and those with disabilities.
"It's common; it's rampant, the fraud in PCS - I've complained about it for years," said Dr. Jane McCaleb, who in 2008 filed one of a number of complaints found in state files about Royal Healthcare.
Forms already filled out
McCaleb, with the Rural Health Group, a nonprofit, federally qualified health center that serves northeastern North Carolina counties, said one young man came into her Halifax County office in 2008 and asked her to sign a form, already filled out by Royal Healthcare, that certified he needed their help. What he really wanted, McCaleb said she discovered, was help with housecleaning and shopping.
"What [personal-care services companies] do is, they start providing services and send in the form on the presumption that you are busy and you'll sign for it," she said.
The Association for Home & Hospice Care of North Carolina, the trade organization, has worked extensively with the state to make sure that only qualified recipients get the care, while pushing its value to tens of thousands of older and disabled people. McCaleb agreed that personal care services are vital in many cases.
"You have to understand: They can't get out of bed; they can't feed themselves," the doctor said.
Deen said Fowowe made arrangements to start paying down his obligation to the state but missed a first payment of $79,043 that was due last month. If he persists in missing payments, he could wind up in civil court.
And unless Fowowe can respond satisfactorily within the next two weeks to the state's bid to take the license of Royal Healthcare, it could be the end for the company whose motto is "Health is Wealth!!!"
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