A skilled nursing facility (SNF) in Riverside, California, and its management company have agreed to pay the United States and California a total of $3.825 million to resolve allegations that they submitted and caused the submission of false claims to Medicare and Medicaid by paying kickbacks to physicians to induce patient referrals. The settlement was announced on June 21, 2023, by the US Department of Justice Office of Public Affairs.
From 2009 through 2019, the SNF, under the direction and control of the management company, gave certain physicians extravagant gifts, including expensive dinners for the physicians and their spouses, golf trips, limousine rides, massages, e-reader tablets, and gift cards worth up to $1,000. Separately, the SNF paid these physicians monthly stipends of $2,500 to $4,000, purportedly for their services as medical directors. At least one purpose of these gifts and payments was to induce these physicians to refer patients to the SNF.
The defendants’ conduct allegedly resulted in false claims to Medicare and California’s Medicaid programs, the latter of which is jointly funded by the federal government and California. Under the settlement, they will pay $3,228,300 to the United States and $596,700 to California.
In addition to resolving their False Claims Act liability, the defendants have entered into a five-year Corporate Integrity Agreement with the US Department of Health and Human Services Office of the Inspector General (HHS-OIG) which requires, among other compliance obligations, an independent organization’s review of their physician relationships.
Compliance Perspective
Issue
The Anti‑Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid, and other federally funded programs. Remuneration includes anything of value and can take many forms besides cash, such as free rent, expensive hotel stays and meals, and excessive compensation for medical directorships or consultancies. It is intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient.
Discussion Points
- Review policies and procedures for preventing and reporting an anti-kickback violation. Update your policies and procedures as needed.
- Train all staff on federal and state anti-kickback statutes and what can be considered a kickback. 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 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.*
