New York Attorney General Letitia James has announced a settlement with Fidelis Care for billing Medicaid for services provided by Cornerstone Herkimer, LLC, despite the company's sole owner and director, Ward Halverson, being excluded from the Medicaid Program. Halverson was banned from Medicaid in 2017 after being convicted of firing a BB gun at a child. Under the terms of the settlement, Fidelis will repay more than $7.6 million to the Medicaid program and implement systematic status checks against federal and state lists of excluded providers.
"New Yorkers should be able to trust that the doctors and health care providers their insurers use are properly licensed and will treat them responsibly," said Attorney General James. "When companies fail to do their due diligence, patients are at risk of being treated by providers who may be unlicensed or unsafe."
Health care providers can be excluded from Medicaid due to fraud or criminal convictions. Managed Care Organizations like Fidelis are required by law to terminate relationships with any excluded provider. State and federal laws mandate that Fidelis conducts routine checks of exclusion lists.
Halverson initially contracted with Fidelis in 2013. He pleaded guilty in 2014 to Attempted Endangering the Welfare of a Child, leading to his license suspension in January 2017 and exclusion from Medicaid in May 2017. Despite this, Fidelis continued payments to Halverson's company until July 2021.
The Office of the Attorney General’s action requires Fidelis to repay $7,681,796.44 to the state Medicaid program and identify exclusion statuses for all participating providers and subcontractors.
This case is part of ongoing efforts by Attorney General James to protect New Yorkers from fraudulent health care practices. Recent actions include securing $8.6 million from Fulton Commons nursing home for financial fraud (March 2024), announcing a guilty verdict against a doctor involved in a kickback scheme (November 2023), suing Fresenius Vascular Care (October 2023), recovering over $3 million from an illegal kickback scheme (September 2023), obtaining over $7.1 million from a former nursing home (February 2023), and indicting a Medicaid fraud ringleader (September 2021).
The investigation was conducted by Principal Auditor-Investigator Christine Rhody and Auditor-Investigator Meagan Knoblauch under OAG’s Medicaid Fraud Control Unit Chief Auditor Dejan Budimir with investigative support by Detective Scott Petucci under Deputy Chief William A. Falk’s supervision. The settlement was managed by Special Assistant Attorney General Tiffany Castleman-Smith under Deputy Chief Diana Elkind’s supervision within MFCU Civil Enforcement Division led by Chief Alee Scott.
MFCU’s total funding for fiscal year 2024 is $68,997,928 with 75 percent awarded under a grant from U.S. Department of Health and Human Services; New York State funds the remaining amount.