A New Jersey home health agency (HHA) operator has agreed to pay $17 million to resolve allegations that it violated the False Claims Act by paying kickbacks through the purchase of two HHAs from a retirement home operator in Arizona.
The September 8, 2021, settlement resolves allegations that the New Jersey HHA owner bought two additional HHAs to generate referrals of Medicare beneficiaries to his parent company from the seller of the two new HHAs who operates additional retirement homes in many states. The government alleges that from January 1, 2014, through October 31, 2020, the parent company submitted false claims for payment to Medicare for services provided to beneficiaries referred to by the New Jersey HHS as a result of the kickback transaction.
Acting US Attorney Rachael Honig stated, “When healthcare providers make or induce referrals that are based on kickback arrangements rather that the best interests of patients, they risk patient harm, threaten the integrity of federal healthcare programs, and violate federal law. The U.S. Attorney’s Office for the District of New Jersey and our partners in the Department of Justice and at HHS-OIG will continue to pursue those who offer kickbacks for patient referrals, no matter the disguise those kickback arrangements might wear.”
The Anti-Kickback Statute prohibits parties who participate in federal healthcare programs from knowingly and willfully offering, paying, or receiving any remuneration in order to induce the recommendation of any item for which payment is made in whole or in part under a covered federal healthcare program. The prohibition extends to asset purchases that are intended to induce referrals.
The civil settlement includes the resolution of claims brought under the qui tam, or “whistleblower” provisions, of the False Claims Act by the former director of strategic growth for the HHAs parent company between 2009 and 2016. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. As part of this resolution, the former director of strategic growth will receive more than $3 million for being a relator of the information. The matter remains under seal as to allegations against entities other than the HHAs parent company.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Compliance Perspective
Issue
The focus of a compliance and ethics program is on protecting government funds from fraud, waste, and abuse, and detecting criminal, civil, and administrative violations while promoting quality of care. The Centers for Medicare & Medicaid Services (CMS) requires skilled nursing facilities to have a compliance and ethics program that is effective in this effort. The Compliance and Ethics Committee, when operated appropriately, will assist in detecting false claims, illegal kickbacks, HIPPA breaches, and other violations. It is imperative that every facility has an effective Compliance and Ethics Committee to reduce the likelihood of healthcare fraud, waste, and abuse of government funds. More information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 1, Compliance and Ethics Program.
Discussion Points
- Review your policies and procedures for operating an effective Compliance and Ethics Program. In addition, review your policy and procedure for preventing and reporting a false claim or anti-kickback statute violations. Update your policies and procedures as needed.
- Train all staff on your compliance and ethics policies and procedures upon hire and at least annually. Also, train all staff on the False Claims Act and Anti-kickback Statute and what can be considered a false claim or kickback. Include information on how to report concerns and suspected violations, and that prompt reporting is mandatory. Document that these trainings occurred and file the signed document in each employee’s education file.
- Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect a false claim or illegal kickback has occurred, whether intentionally or unintentionally. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim. Also periodically perform audits to ensure all are aware of compliance and ethic concerns and their knowledge of who or where they can report any concerns of compliance and ethics violations.
