A second home health provider is transferring hundreds of patients after a fraud investigation led the state to cut off Medicaid payments to the company.
The disruption affects about 800 patients who were served by Avenue Homecare Services Inc. of Lawrence. It started transferring patients in late September, following a decision by officials at the state’s Medicaid program, called MassHealth, to stop paying the company in August.
Suspecting fraudulent behavior, MassHealth referred the company to the attorney general’s office in June 2015. More than a year later, MassHealth stopped payments after the attorney general’s office said doing that would no longer compromise its investigation.
Attorney General Maura Healey’s office declined to comment, and MassHealth officials did not detail the allegations, except to say that Avenue allegedly used inappropriate tactics to expand its business, including trying to disenroll seniors from a managed care program and seeking to add them as customers.
The company’s executives did not return several phone calls requesting comment.
It is the second home health company that MassHealth has stopped paying. The other is Compassionate Homecare Inc. in Worcester, which was indicted last week for allegedly filing false claims and bilking the state of more than $800,000. Compassionate also transferred its patients earlier this year after the state cut off payments.
MassHealth spokeswoman Sharon Torgerson said the program is helping Avenue’s patients find new home health providers. Home health services include nursing care and physical and occupational therapy.
“MassHealth, on a daily basis, is receiving a member list of transfers from Avenue and the agencies the members will be transferring to,’’ Torgerson said in an e-mail. “MassHealth is in regular contact with Avenue Homecare to provide guidance and support in transferring members to ensure continuity of care of members during this transition.’’
MassHealth, which covers 1.8 million low-income residents, spent more than $755 million on home health services in the fiscal year that ended June 30, a surge of 82 percent from two years earlier. In an effort to control that spending, the program has been auditing home health companies.
A recent audit found that Avenue overbilled the state by nearly $4.6 million. It is one of nine companies that collectively overbilled the state by nearly $23 million, according to state officials. Most of the companies have disputed the allegations.
Priyanka Dayal McCluskey can be reached at priyanka.mccluskey @globe.com. Follow her on Twitter @priyanka_dayal.
