About 100 “Megumi” facilities for the disabled nationwide unable to operate; joint liability system to be applied

From The Mainichi Shimbun

June 25 2024

TOKYO & AICHI– The Ministry of Health, Labor and Welfare has decided to apply the “joint liability system” based on the Comprehensive Support for Persons with Disabilities Act to Megumi (headquartered in Minato Ward, Tokyo), which operates a group home (GH) for the disabled, following the administrative action of canceling the company’s business operator designation for the GH, in relation to the issue of fraudulent claims for disability welfare service fees and overcharging food costs. Aichi Prefecture and Nagoya City are expected to cancel the business operator designation of five GHs in the prefecture operated by the company on the 26th, and the Ministry of Health, Labor and Welfare is expected to apply the associative responsibility system on the same day. This was revealed through interviews with related parties.

The company operates about 100 GHs in 12 prefectures across the country. The Ministry of Health, Labour and Welfare has determined through its investigations that the fraud was systematic. If the joint liability system is applied, other GHs across the country will not be allowed to renew their designations every six years, and will effectively be unable to operate their facilities. According to the Ministry of Health, Labour and Welfare, there is no precedent for the joint liability system being applied to a corporation that operates a disability welfare service facility on the company’s scale, and it is possible that up to about 2,000 users will be affected.

The GHs whose designations will be revoked are in Koda-cho, Aichi Prefecture, Midori-ku, Kita-ku, Moriyama-ku, and Tenpaku-ku, Nagoya City. According to sources, the company had been fraudulently claiming remuneration from local governments by pretending that employees who did not actually work were working at multiple GHs, including these five. The amount of fraudulent claims is said to be about 100 million yen just for GHs in Nagoya City, and Aichi Prefecture and Nagoya City will revoke the designations of the five most malicious GHs based on the Comprehensive Support for Persons with Disabilities Act.

According to a source, the five facilities to be disposed of are expected to have their designations revoked in the next few months, taking into account the time it will take for the businesses to be transferred to other operators or the users to relocate, and the system of collective responsibility will be applied from that point onwards. In addition, other facilities in the prefecture to which the system of collective responsibility applies will have their designations renewed in sequence from around October.

In 2022, Okazaki City in Aichi Prefecture provided information to the prefecture about the company, alleging that it was collecting food fees from users that far exceeded the actual cost. The prefecture began an investigation and began auditing the company’s GH in May last year. All 26 facilities in the prefecture had been overcharging fees since they opened, totaling approximately 218 million yen. Nagoya City and others have determined that this is “economic abuse.” During these investigations, Aichi Prefecture and others also found fraudulent claims for disability welfare service fees.

The company was established in 2012, and expanded its business scale starting with the opening of a GH in Nagoya City in 2018. According to the company’s website, it operates GHs in 11 prefectures, including Aichi, Chiba, Saitama, Kanagawa, and Fukuoka, as well as Tokyo. It moved its headquarters from Nagoya to Tokyo in July last year.