The illegal agreement prevented patients and their caregivers from selecting their own providers.
A recent investigation by New York's Office of the Attorney General (OAG) uncovered an unlawful “no poach” agreement between Affordable Senior Care of New York and its competitor, Marks Homecare Agency. Laszlo Friedman, Affordable's founder, entered the agreement with Marks Homecare, which prevented them from taking each other's existing patients.
“On several occasions, vulnerable patients were unable to switch to a provider that could have paid their caregivers more,” according to the OAG.
Several patients who tried to switch to Affordable were rejected because they were patients of Marks Homecare, the OAG said. Additionally, Affordable and Marks Homecare also exchanged information about the hourly rates they were paying caregivers to reduce competition.
"Home care companies like Affordable Senior Care are entrusted to make it easier to take care of a loved one, but instead they broke that trust and broke state laws," Letitia James, New York Attorney General, said in a statement.
“Patients and their caregivers should be able to work with the provider of their choice,” James said. “This agreement puts an end to harmful backroom deals in the home care industry that limit patients’ options and reduce caregiver wages.”
As a result of the OAG's investigation, Affordable and Friedman aren't permitted to enter into future anti-competitive agreements, must pay a penalty of $400,000, and cooperate with the OAG in ongoing home care investigations. Additionally, Affordable will have to administer an antitrust compliance program with training for management and executive staff, providing annual reports to OAG on its compliance for the next five years.
Jasmyne Ray is the revenue cycle editor at HealthLeaders.