By Jonathan Stempel
NEW YORK (Reuters) - A federal judge on Tuesday said Visiting Nurse Service of New York, which calls itself the largest U.S. nonprofit home health care agency, must face much of a whistleblower lawsuit accusing it of defrauding Medicare and Medicaid and failing to provide patients with care prescribed by doctors.
U.S. District Judge Alison Nathan in Manhattan said the plaintiff Edward Lacey plausibly alleged that the nonprofit filed false payment claims based on several alleged fraudulent schemes, violating the federal and state False Claims Acts.
The nonprofit said it served 142,057 patients last year in New York City, Nassau, Suffolk and Westchester counties.
Visiting Nurse Service and its lawyers did not immediately respond to requests for comment on the decision, which was issued early Tuesday evening. Lawyers for Lacey did not immediately respond to similar requests.
Lacey had been a Visiting Nurse Service vice president of operations improvement and integration and worked there for 16 years before leaving in January 2015.
He accused his former employer of extracting hundreds of millions of dollars from Medicare and Medicaid through false and improper billings, including services that doctors ordered but which it never provided for tens of thousands of "elderly, disabled and impoverished" patients.
While dismissing parts of the lawsuit, Nathan said Lacey detailed many instances of alleged improper care, including for 14 patients with such conditions as Alzheimer's disease, coronary disease, diabetes and a kidney transplant who received only small fractions or none of the care they were prescribed.
Lacey "successfully alleged that VNSNY's misrepresentations that it both intended to follow and did ultimately follow patients' plans of care were material to CMS's decision to pay its claims," Nathan wrote, referring to the federal government's Center for Medicare and Medicaid Services.
Citing statutes of limitations, Nathan limited the lawsuit to periods after July 28, 2008 for federal law-based claims and after July 28, 2004 for New York state law-based claims.
False Claims Act cases let whistleblowers sue on a government's behalf and share in proceeds.
Nathan let Lacey sue even though the U.S. Department of Justice and New York attorney general's office declined to help him, as they sometimes do in cases they consider stronger.
The case is U.S. and State of New York ex rel Lacey v. Visiting Nurse Service of New York, U.S. District Court, Southern District of New York, No. 14-05739.
(Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman)