The United States Attorney’s Office for the Middle District of Pennsylvania announced on December 5 that a 71-year-old man was charged with one count of conspiracy to engage in theft or bribery concerning programs receiving federal funds, related to actions between 2002 and 2022.
According to United States Attorney Gerard M. Karam, the charges allege that the defendant, while working at a Pennsylvania nursing home, conspired with an unnamed physician to receive kickback payments. The nursing home, a recipient of Medicare benefits exceeding $10,000 per year, was allegedly targeted in the scheme. Under federal law, it is a crime to embezzle, steal, obtain by fraud, or misapply property worth at least $5,000 from an organization receiving federal funds exceeding $10,000 annually.
The physician reported to the defendant, who managed the workers’ compensation program at the nursing home. The defendant had hired the physician for this role with the condition that the physician would pay half of his salary, approximately $1,700 to $2,500 per month, to the defendant via a company the defendant had set up. The defendant made his wife the nominal president of this company.
The physician agreed to this arrangement, which required only a few hours of work per month. His responsibilities included evaluating the defendant’s workers’ compensation claims, allowing the defendant to work a reduced schedule while receiving the same compensation. To conceal the payments, the defendant and physician exchanged money privately at the physician’s home rather than at the workplace.
It is alleged that, over a period of approximately 20 years, the defendant and physician conspired to embezzle, steal, obtain by fraud, and misapply approximately $528,450 from the nursing home.
Compliance Perspective
Issue
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals for Medicare, Medicaid, and other federally funded programs. It aims to protect healthcare decision-making from financial incentives that could lead to unnecessary services and waste of taxpayer funds. Failure to follow accounting principles and establish proper checks and balances may result in neglect of fiduciary duties, jeopardizing the protection of residents’ and facility assets, and violating state and federal laws. Nursing facilities must have systems to verify and approve transactions to prevent misappropriation of funds.
Discussion Points
- Review and update policies on anti-kickback violations and false claims. Implement a Triple Check Process to verify Medicare claims and ensure a system of checks and balances to prevent embezzlement.
- Train all staff on anti-kickback statutes, what constitutes a kickback, and compliance procedures. Provide initial and annual training, including reporting violations and recognizing false claims. Ensure accounting and billing staff are trained to identify and report suspicious behavior.
- Conduct regular audits to assess staff understanding of reporting procedures for illegal kickbacks or false claims. Implement routine audits of documentation, billing practices, and financial accounts to detect errors or misuse before they escalate. Address concerns immediately.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
