Florida obtains judgment in home-care reimbursement case

Jul 1, 2008

South Florida Sun-Sentinel--June 30, 2008

By Diane C. Lade

The state has obtained an $8.5 million civil judgment against two owners of a company that sold elder Floridians assisted-living service contracts, then failed to reimburse home health agencies for at-home care, Florida Attorney General Bill McCollum said Monday.

The lawsuit, filed against Homeward Bound Services of North America in May 2007, charged that the company would delay payments to local home health providers or, in some cases, not pay them at all, shifting the financial responsibility to the plan holders.

State regulators also said the contracts were designed to look like insurance products, but structured to skirt state insurance regulatory guidelines.

The Leon County Circuit Court ruled that 555 plan holders should receive $15,000 each, and that consumers would be first in line to receive any money that can be obtained from co-owners Marc Orth and Thomas Muldoon, said Attorney General spokeswoman Sandi Copes.

Orth and Muldoon admitted in court that they knew advertising for Homeward Bound’s products were false and that employees were told to lie to plan holders about claims payments, Copes said. Plans covered under the complaint were sold in Florida from 2003 through 2007.

Neither Homeward Bound nor its marketing arm, TLC Services of North America based in Pennsylvania, were named in the Florida settlement.

Homeward Bound also has been investigated in its home state and several others, including California.

Kim Champion, owner of Champion Home Health Care that operates agencies from Fort Lauderdale to Gainesville, said she was encouraged that the ruling was against the two owners rather than the company.

"The owners may still have assets. The company doesn’t," said Champion, who had about a dozen Homeward Bound clients. The company owed her about $15,000 by the time she stopped accepting the plans, money she now is collecting directly from the plan holders.

Rhonda Schroeder, owner of Elder Alternatives home care agency in Boca Raton, said Homeward Bound didn’t reimburse her for about $31,800 worth of home health services, most of which she says she never will collect. One man died with an account balance over $10,000.

Now she says she no longer accepts seniors with any assisted-living service contracts "unless they pay up front."

Diane Lade can be reached at dlade@sun-sentinel.com or 954-356-4295 or 561-243-6618.

Assisted living service contracts, also called long-term care service contracts, are being sold to Florida seniors as a way to pay for nonmedical care in the home. What you need to know:

If you sign a responsible party agreement with a home-care agency, you will be responsible for covering your bills if your contract doesn’t pay.

To check if a contract or membership company is being investigated, call the Florida Attorney General at 866-966-7226 or go to www.myfloridalegal.com.