Peekskill Service Provider Charged with Medicaid Overbilling

The following was provided by Governor Andrew Cuomo’s office: An investigation by the state of New York has found that Peekskill’s Guest House Community Services has overbilled the state in the amount of $152,491.22 in Medicaid funds. Guest House agreed to repay the money under the terms of a settlement agreement reached with the Office of the Medicaid Inspector General (OMIG). The investigation was performed by the New York State Commission on Quality of Care and Advocacy for Persons with Disabilities (CQC).

The Commission’s fiscal investigation of Guest House found:

• More than half of the services billed to Medicaid did not meet at least one of the regulatory qualifications required by the Medicaid program; 

• Many of the services provided by Guest House failed to meet the basic standards required by the Office for People With Developmental Disabilities (OPWDD), which licensed the agency’s programs; and,

• The board of directors failed in its fiduciary responsibility by not ensuring that the agency had proper internal controls in place to prevent these financial abuses.

“We will not stand for improper use of public money that should be going for services that help people with disabilities,” said Roger Bearden, Chair of the New York State Commission on Quality of Care and Advocacy for Persons with Disabilities.  “When we uncover such financial misconduct, we work closely with prosecutors to punish those responsible and to recover the money.”

The recovery of Medicaid funds was the result of a year-long investigation by CQC which also found that Guest House’s Executive Director, Joseph Akumu, diverted more than $132,000 to himself from Medicaid checks that were payable to Guest House.  The investigation found he had used another $168,000 in agency Medicaid funds for personal expenditures, including the use of the agency’s debit card to withdraw cash from ATMs in Kenya. 

“This case demonstrates what is possible when agencies collaborate to combat fraud,” said Acting Medicaid Inspector General James C. Cox.  “Vulnerable persons with disabilities deserve to be protected from such blatant misuse of scarce state resources.”

CQC’s probe also discovered that Akumu diverted another $139,000 in Medicaid funds to programs in Maryland that were purportedly set up to serve individuals with developmental disabilities.  However, no programs were ever established and the funds appear to have personally benefitted the executive director and the board president.

Recovery of that money is currently being sought as part of Akumu’s conviction in United States District Court last summer, which resulted in him being sentenced to 24 months in prison and being ordered to repay Guest House the money that he stole.  Under the settlement with OMIG, up to $300,000 in additional funds will be returned to the state from any money Guest House recovers from Akumu.

As an additional deterrent, Cox added that Akumu has been excluded from the Medicaid program and is barred from receiving Medicaid funds in the future.

The investigation into Guest House was the work of a state and federal partnership between CQC, the Health and Human Services Office of the Inspector General, and the Immigration and Customs Enforcement in the Department of Homeland Security. Akumu was prosecuted by the U.S. Attorney’s Office for the Southern District of New York after it received the findings of the CQC investigation.  CQC investigators involved in the case included Jim Newell, Michelle Tate, Pam Williams and Mike Kester. 

Guest House serves children and adults with developmental disabilities by providing programs and services that are designed to improve the quality of their lives and that of their families. Akumu was a founder of Guest House and served as its paid Executive Director until 2010.