New York

Melvin Lev, the embattled director of the Community Health Accreditation Program, used more than $120,000 of the organization's money to throw a lavish party for his wife, to purchase fitness club memberships for himself and his friends and to finance his car, according to sworn testimony from former and current CHAP executives.

Police escorted Lev off CHAP's premises on March 1, and three days later the New York State Supreme Court extended a temporary restraining order barring Lev from returning to CHAP.

During his one-year tenure as chief executive officer of CHAP, Lev also disbanded CHAP's board of directors for a period of four months, hired family members who had no health care or accreditation experience, and paid his own for-profit company to provide services to CHAP at a premium rate, the attorney general of the State of New York alleged.

Additionally, Lev purchased CHAP's membership from the Washington-based National League for Nursing in February 2001, thereby violating a federal law that prohibits transfers of not-for-profit corporate memberships, the attorney general said. The deal saddled CHAP with a $240,000 debt that the organization did not previously have, and required CHAP to transfer an additional $160,000 to NLN.

In light of these allegations, the attorney general has asked a State Supreme Court judge to grant a preliminary injunction against Lev, Lev's family and the NLN, which would require these defendants to stay away from CHAP until the court issues a final ruling in the case.

Founded in 1965 by the NLN — a not-for-profit organization that focuses on nursing education — CHAP became incorporated in 1988. The NLN continued to direct CHAP's activities — which include accrediting home health agencies, home medical equipment companies, hospices and other out-of-hospital service providers — until Lev purchased CHAP's membership in 2001.

From 1998 to 2000, CHAP grew considerably, attracting large, national home health care chains such as Clearwater, Fla.-based Lincare and Norcross, Ga.-based Pediatric Services of America, according to Jerold Cohen, who served as CHAP's president from 1998 to 2001.

“We were more user friendly,” Cohen explained, “and these companies liked what they saw.”

At that time, CHAP was paying NLN approximately $20,000 per month to rent office space and to pay for the upkeep of a common computer server, according to sworn testimony from Dianne Feinstein, CHAP's vice president of operations and business development.

The tensions that resulted from NLN's failure to explain these charges prompted Feinstein, in May 2000, to approach Lev and his wife — both longtime friends of Feinstein — about financing CHAP's home medical equipment division into a for-profit corporation. But the idea was short-lived, Feinstein explained, because the Baltimore-based Centers for Medicare and Medicaid Services told CHAP that such a drastic change would require CHAP to reapply for the authority to accredit Medicare service providers.

Nonetheless, Feinstein continued, Lev went ahead with negotiations to buy CHAP's membership from NLN, after CMS conceded that reapplication would not be necessary as long as CHAP's not-for-profit status and CHAP's board of directors remained intact.

Almost as soon as Lev assumed control of CHAP in February 2001, he named himself chief executive officer, fired the organization's vice president of accreditation and asked CHAP's entire board of directors to resign, according to sworn testimony from both Cohen and Feinstein.

Lev also hired his son, Russell Lev, as CHAP's compliance officer, despite the fact that Russell had “no experience or skills that are relevant to CHAP's not-for-profit activities,” Feinstein testified.

Cohen, who currently is a home health care consultant with Woodbine, N.J.-based Caesar Cohen Limited, first approached the attorney general with concerns about Lev's actions early in June, approximately three weeks before Lev fired Cohen as president of CHAP, Cohen said.

Members of CHAP's board of directors identified similar concerns in September 2001, according to Feinstein's testimony.

A spokesman from CMS confirmed that the agency is aware of the proceedings at CHAP, and “we're watching the situation to see what develops,” he said.

Despite Lev's alleged abuses, Maione of the attorney general's office insisted that CHAP still is a viable, good company.

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