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Home Care Business Leaves Clients In the Lurch: When A Discount Plan For the Elderly Ended, Its Partners Inherited the Bills
By Victor Hull, New York Times Regional Newspapers
August 8, 2005
Peace of mind was supposed to be "a phone call away" for Deb Marqua and her elderly parents.
For a fee of $5,775, Marqua's parents bought a "lifetime membership" into Suncoast Home Care Inc. The membership locked in discounts on home services -- bathing, cleaning and dressing, which would allow them to stay in their own home.
But when they finally called for home care help this year, the company they paid in 2001 no longer existed. Suncoast Home Care Inc. and a sister company, Suncoast Home Care Membership Association Inc., abruptly shut down late last year.
Suncoast's demise left countless Southwest Florida residents with little to show for their money and also stiffed its business partners, leaving them with unpaid bills for services to Suncoast's clients.
Suncoast's strategy appears similar to methods used in the exploding -- and largely unregulated -- field of discount health services.
Tapping into a growing elderly and uninsured population, more businesses are offering access to discounts from doctors, hospitals, dentists and other services for a fee.
Today, an estimated 2 million Floridians participate in discount medical plans.
It isn't clear how many discount plans in Florida and elsewhere are geared toward the home care market -- at least one other company is based in Sarasota County and another in Miami.
What is certain is as the discount business in general has grown, so have consumer complaints.
Complaints against the Suncoast operations led Florida Attorney General Charlie Crist's economic crimes division to open an investigation last month into the businesses and their owner, Joseph J. DeMarco.
The civil investigation turns on whether officials think Suncoast was simply a failed business venture or a scam.
"It would have to be intent to deceive and take advantage of the consumer," said JoAnn Carrin, spokeswoman for Crist. "Were the consumers offered a product that the providers did not intend to provide and did not provide?"
Several of Suncoast's customers contend they were deceived. And they said the state needs to move aggressively to protect Florida's older residents from similar businesses.
Marqua said the experience has made her parents, who did not want to be identified, more wary. That, in turn, makes it more difficult for her to arrange for home care for the Manatee County couple, now nearing 90.
"It's difficult to sell them on the idea that they should trust somebody else, because they're thinking, `What do they want out of me?' " said Marqua, 55, who lives in Sarasota.
An insurance agent sold Marqua's parents on a membership with Suncoast Home Care, established by DeMarco in 1996 as an alternative to long-term care insurance.
"It seemed to me at the time it would be worth it," Marqua said. "It seemed like a good plan."
They didn't need it until March, when Marqua's father became dizzy. She told them, "It's time to use the plan you bought into."
But according to the state's corporate records, DeMarco had dissolved Suncoast Home Care and the Suncoast Home Care Membership Association, which he had set up in 2002, on Dec. 31.
Pat Smith and her husband, Schuyler, bought a membership for Schuyler's mother in Bradenton. Like Marqua's parents, they purchased the membership through an insurance agent and assumed it was a form of insurance. According to one brochure, Suncoast offered agents sales commissions of 40 percent.
"Why would we think it was anything else?" Smith said. "It was sold through a broker. When an insurance broker sells you something, you absolutely think it's an insurance product."
But like discount medical plans offered in Florida and other states, Suncoast's discount home care plan was not insurance.
Suncoast often hired other home care companies to provide in-home services, then paid them the difference between their regular rates and the discounts the customers paid.
Tom Palmer, who owns Approved Home Health in Bradenton, said he has more than $2,000 in unpaid bills for Suncoast clients. He and other home care providers have tried to work on rates with customers hurt by Suncoast's closure.
Palmer contacted local law-enforcement agencies, the Department of Children & Families and the insurance department with complaints about Suncoast.
"It is abuse of the elderly," he said. "How can they allow it?"
Gene Tischer, who heads a state association of home health providers, worries that complaints like the ones against Suncoast could give the industry a black eye.
The state has received other complaints against companies that charge fees for access to discounts to doctors, dentists and other service providers -- thousands during the past decade, according to the state Department of Financial Services.
The complaints prompted the Florida Legislature last year to become one of the first states to try to regulate discount businesses. A state law that took effect this year requires the companies to be licensed and gives the state some other limited authority over them.
However, before the law had time to take effect, lawmakers this year watered down some of the consumer protection provisions, including one that required a minimal corporate net worth and a security deposit with the state.
Bob Lotane, a spokesman for the state insurance department, said home care discount companies should fall under the new licensing law.
Carrin, the attorney general's spokeswoman, said officials are investigating at least four complaints against Suncoast. She said anyone else who believes they have been a victim should call the state's toll-free fraud hotline at 866-9-NOSCAM.
The complaints allege that Suncoast failed to provide services consumers said they were promised. Penalties under state law carry a fine of $10,000 per incident, or $15,000 per violation if the victim is disabled or elderly, Carrin said.
DeMarco, contacted twice at his home, referred questions to another Sarasota lawyer, James Gibson.
Gibson said he was unaware of the attorney general's investigation and had only limited knowledge of the company. He said he understood that DeMarco dissolved the businesses because "the company was no longer financially viable."
Marqua said she doesn't expect to recover any of her parents' money. But she wants them and other Suncoast customers to realize they didn't do anything wrong.
"They didn't do a dumb thing," she said. "They dealt with people who were not delivering what they promised."
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