Attorney General James secures $6 million from three Buffalo nursing homes over years-long fraudulent billing scheme

New York – New York Attorney General Letitia James has secured $6 million from three nursing homes in the Buffalo region after a joint state and federal investigation found that the facilities submitted tens of thousands of fraudulent Medicaid claims over several years.

The settlement involves Safire Rehabilitation of Northtowns, Safire Rehabilitation of Southtowns and Williamsville Suburban Nursing Home, collectively known as the Safire homes. Investigators found that the facilities used false information about the rehabilitation needs of certain residents to increase the amount of money they received from Medicaid.

The conduct uncovered by investigators took place between July 1, 2016, and December 31, 2020. During that period, the nursing homes allegedly manipulated information submitted to the New York Department of Health in ways that affected how their Medicaid reimbursement rates were calculated.

The investigation was conducted jointly by the New York Attorney General’s Office Medicaid Fraud Control Unit and the United States Attorney’s Office for the Western District of New York. According to the findings, the Safire homes falsely reported that some residents required higher levels of rehabilitative care during periods that affected Medicaid reimbursement rates. The inflated information then resulted in higher payments to the facilities.

At other times, when the amount of rehabilitation services provided would not affect the reimbursement rate, investigators found that the homes reduced the services given to certain residents, regardless of whether those residents actually needed the services.

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The result, according to the investigation, was a billing system that generated millions of dollars in additional Medicaid payments for the nursing homes.

“Nursing homes that commit financial fraud are stealing funds meant to provide care for our most vulnerable,” said Attorney General James. “The Safire homes used fraudulent data to rake in millions of dollars from Medicaid without regard for the needs of the residents they were supposed to be serving. My office has rooted out fraud and resident neglect in nursing homes throughout New York, and we will continue to investigate Medicaid fraud to protect New Yorkers.”

The case also drew a warning from federal prosecutors about the broader impact of healthcare fraud. “Medicare and Medicaid fraud drains taxpayer funds and weakens these vital government programs,” said U.S. Attorney for the Western District of New York Michael DiGiacomo. “This settlement reinforces our commitment to safeguarding federal funds and ensuring seniors receive the care they deserve.”

Under the agreement, the Safire homes will repay a total of $9 million. Of the $6 million tied to the Medicaid fraud settlement, $3.6 million will go directly to New York, while another $2.4 million will be paid to the federal government.

The facilities will also pay an additional $3 million to the federal government for defrauding Medicare. Taken together, the payments represent a substantial financial penalty for the nursing homes and resolve the state and federal allegations involving the fraudulent billing practices.

The settlement requires more than just repayment. The Safire homes must also introduce new policies and procedures designed to prevent similar conduct in the future. The facilities will be required to ensure that residents covered by Medicaid receive the services they actually need and that those services are properly documented.

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The changes are intended to address one of the central concerns raised by the investigation. Nursing homes are required to provide the New York Department of Health with accurate information about the care and services required by their residents. That information is used by the department to determine Medicaid reimbursement rates for claims submitted during the following six months.

Because the reimbursement system relies on the accuracy of information supplied by nursing homes, false reporting can have a direct financial effect. In this case, investigators determined that the Safire homes took advantage of that system by changing the reported level of rehabilitation needs depending on whether the information would affect their reimbursement.

The investigation began after a whistleblower filed a complaint in December 2020. The complaint was brought under the qui tam provisions of both the New York False Claims Act and the federal False Claims Act in the U.S. District Court for the Western District of New York.

The New York False Claims Act allows private individuals to bring legal actions on behalf of the government when they believe fraud has occurred. Those individuals may also be eligible to receive a share of money recovered by the government as a result of the case.

The role of the whistleblower was significant because the complaint ultimately led state and federal authorities to examine the Safire homes’ billing practices over a period stretching back several years.

The case also highlights the work of the Attorney General’s Medicaid Fraud Control Unit, which investigates fraud involving Medicaid providers as well as abuse and neglect of nursing home residents. The unit works to protect public funds while also addressing conduct that can affect the quality of care provided to vulnerable residents.

Authorities said people who believe they have information about Medicaid provider fraud or an incident involving abuse or neglect at a nursing home can report it confidentially to the Medicaid Fraud Control Unit. The office accepts complaints online and through its hotline.

The investigation was conducted by Auditor-Investigator Rebecca Whitescarver under the supervision of Regional Chief Auditor Mary Henry. Members of the Data Analytics Team, including Si Lok Chao and Elise Roche, also provided support. Chief Auditor Dejan Budimir supervised the audit and data analytics teams.

The settlement was handled by Special Assistant Attorneys General Jill D. Brenner and Amanda L. Raimondi. They worked under the supervision of Chief of Civil Enforcement Alee Scott and Buffalo Regional Director Paul C. Parisi.

The Medicaid Fraud Control Unit is led by Director Amy Held and Assistant Deputy Attorney General Thomas O’Hanlon. MFCU is part of the Division for Criminal Justice, which is led by Chief Deputy Attorney General José Maldonado and overseen by First Deputy Attorney General Meghan Faux.

The financial resources available to the unit also reflect the scale of its responsibilities. For federal fiscal year 2026, New York MFCU has total funding of $70,793,651. Seventy-five percent of that amount, or $53,095,240, comes through a grant from the U.S. Department of Health and Human Services. New York State provides the remaining 25 percent, totaling $17,698,411.

For the three Buffalo-area nursing homes involved in the case, the settlement closes a years-long investigation while imposing both financial and operational requirements. The facilities have admitted wrongdoing as part of the settlement and must now repay the money and change their procedures.

For state and federal officials, the case also serves as a reminder that fraudulent healthcare billing can affect more than government budgets. Medicaid and Medicare funds are intended to support healthcare services, including care for older adults and other vulnerable residents. When inaccurate information is used to obtain higher reimbursements, investigators say, those resources can be diverted away from their intended purpose.

The agreement therefore combines financial recovery with measures aimed at preventing future misconduct. The Safire homes must ensure that rehabilitation services are based on residents’ actual needs, that required care is delivered and that records accurately document the services provided.

The investigation into the Buffalo-area facilities underscores the importance of accurate reporting within the nursing home system. For Medicaid reimbursement to reflect the care residents require, authorities depend on nursing homes to provide truthful and complete information. The settlement announced by Attorney General James puts the three Safire homes on notice that manipulating that information for financial gain can lead to significant state and federal consequences.

Officials said the investigation and settlement are part of broader efforts to combat fraud and protect residents in nursing homes across New York. The Attorney General’s Office has indicated that it will continue pursuing cases involving Medicaid fraud, abuse and neglect as it works to protect both public funds and the people who depend on nursing home care.