A Florida home healthcare company has agreed to pay $225,000 to resolve allegations that it violated the False Claims Act (FCA) by paying kickbacks to two physicians in the form of sham medical director or sublease agreements in exchange for patient referrals. The company’s CEO and majority owner has agreed separately to pay $105,000. In addition, the United States has reached agreements with Doctor 1 and Doctor 2 to pay $100,000 and $61,943.44, respectively, to resolve allegations that each accepted kickbacks from the company in exchange for patient referrals. The announcement of the settlement was made on May 23, 2023, by the Department of Justice’s Office of Public Affairs.
On Jan. 15, 2021, the United States filed complaints in intervention in two whistleblower lawsuits brought under the FCA against the company and its CEO alleging that they knowingly billed Medicare for home health services for patients referred to the company by Doctor 1 from Nov. 15, 2012, through Nov. 14, 2014, while paying the doctor under sham medical director agreements. Although the doctor performed no services, the company paid him $50,000 to induce him to refer patients to the company.
The United States further alleged that the company and its CEO knowingly billed Medicare for home health services for patients referred to the company by Doctor 2 from Dec. 1, 2012, through March 5, 2014, while paying him through his medical practice, under sham sublease agreements. Although the company did not use the space, it paid Doctor 2 $30,971.72 to induce him to refer patients to the company.
“Medicare funds should be used to provide care for our seniors, not to induce physicians to refer business,” said US Attorney Roger Handberg for the Middle District of Florida. “This office will take action against individuals who make unlawful payment to physicians in exchange for patient referrals.”
Compliance Perspective
Issue
Under federal and state Anti-kickback Statutes, you may not knowingly and willfully offer, pay, solicit, or receive anything of value to induce or reward for referrals of federal or state healthcare program business. The prohibition against kickbacks applies to those who pay for referrals and to those who receive them. Kickbacks can take various forms, such as bribes or rebates. They can be given in cash or in kind. Failure to promptly report a kickback can result in lawsuits, fines, and other sanctions. It is also illegal to submit claims for payment to Medicare or Medicaid that you know or should know are false or fraudulent. Filing false claims may result in fines of up to three times the programs’ loss plus $11,000 per claim filed. Under the civil False Claims Act, each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly. Facility staff should be knowledgeable in how to report suspicious billing practices.
Discussion Points
- Review policies and procedures for preventing and reporting an anti-kickback violation. Also review your policies and procedures for preventing and reporting a false claim and for conducting a Triple Check Process to verify accuracy of Medicare claims. Update your policies and procedures as needed.
- Train all staff on federal and state anti-kickback statutes and what can be considered a kickback. Also train staff upon hire and at least annually on your compliance and ethics procedures and what can be considered a false claim. Include information on how to report concerns and suspected violations, and make sure staff know that prompt reporting is mandatory. Document that the trainings occurred and place in each employee’s education file.
- Periodically audit staff understanding to ensure that they are aware of what should be done if they suspect an illegal kickback or false claim 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.
*This news alert has been prepared by Med-Net Concepts, LLC for informational purposes only and is not intended to provide legal advice.*
