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Worcester home health company’s owner accused of stealing $2.7m from MassHealth

The owner of a Worcester company that provides home health care services was arrested Wednesday and charged with stealing $2.7 million from the state Medicaid program, in the latest case of alleged fraud in the home health industry.

Hellen Kiago of Sturbridge was charged with larceny and making false Medicaid claims after a grand jury returned indictments against Kiago and her company, Lifestream Healthcare Alliance LLC, Attorney General Maura Healey’s office said Wednesday.

Kiago, 47, is accused of using her company to overbill the state Medicaid program, called MassHealth, for services that were not authorized by a physician. Kiago allegedly instructed an employee to forge physician signatures.


The overbilling occurred since at least July 2015, according to the attorney general’s office.

Kiago pleaded not guilty in Worcester Superior Court, and her bail was set at $100,000 cash.

She did not immediately respond to messages seeking comment.

Her company, Lifestream, is among scores of home health agencies that contract with MassHealth to provide such services as nursing care and physical therapy to patients in their homes. Lifestream has done business with MassHealth since 2014, submitting claims totaling more than $23 million for about 490 patients, according to court documents.

MassHealth officials said Wednesday that they have stopped doing business with Lifestream and will help members who received services from the company to find a new home health provider.

The charges against Lifestream follow similar action against a Boston-based home health agency, Harmony Home Health Care LLC, in July. The owner and an employee of Harmony were also accused of stealing nearly $2.7 million from MassHealth through false billing.

MassHealth provides coverage to 1.9 million poor, elderly, and disabled Massachusetts residents, and it accounts for the biggest piece of state spending. Amid a surge in spending on home health services, MassHealth officials last year tightened rules for the home health industry and audited several companies. They also said they referred several cases of possible fraud to the attorney general’s office, which is still investigating.


MassHealth spending on home health services surged to $750 million in the 2016 fiscal year, but officials said their cost-control efforts brought spending down to about $550 million in 2017.

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.