The DOJ Tuesday announced the biggest settlement ever involving alleged violations of the Anti-Kickback Statute by skilled nursing facilities in the United States.
Hebrew Homes Health Network Inc., an owner and operator of seven skilled nursing and rehabilitation facilities in the Miami-Dade area, agreed to pay $17 million to settle the allegations.
Stephen Beaujon, Hebrew Homes’ chief financial officer from September 2002 to February 2012, was awarded $4.25 million from the settlement.
He had filed a qui tam lawsuit against his former employer.
The qui tam or whistleblower provisions of the False Claims Act allow individuals to sue on behalf of the government for false claims and to share in any recovery.
Beaujon’s suit alleged Hebrew Homes violated the False Claims Act by improperly paying doctors to refer Medicare patients.
The DOJ can take over qui tam lawsuits, as it did in this case.
“Illegal inducements paid to physicians in exchange for patient referrals will not be tolerated,” the DOJ’s Benjamin Mizer said. “Medicare funds should be used to provide care for our senior citizens, not as an inducement to physicians to refer business.”
From 2006 through 2013, the DOJ alleged, Hebrew Homes hired medical directors for “ghost positions” that required them to perform few or no real job duties.
“Instead, they were allegedly paid for their patient referrals to the Hebrew Homes facilities, which increased exponentially once the medical directors were put on the payroll,” the DOJ said.
As part of the settlement, William Zubkoff, the president and executive director of Hebrew Homes, agreed to resign from his positions and no longer be an employee of the company.
Hebrew Homes does business as the Plaza Health Network. Its facilities are Arch Plaza, Aventura Plaza, Jackson Plaza, Ponce Plaza, Sinai Plaza, South Pointe Plaza, and University Plaza — all in the Miami-Dade area.
Hebrew Homes entered into a five-year corporate integrity agreement with the inspector general’s office of the U.S. Department of Health and Human Service. It also agreed to change its policies on hiring medical directors.
The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives, the DOJ said. The law prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare.
The DOJ said the claims resolved by Tuesday’s settlement are allegations only and there has been no determination of liability.
The case was United States ex rel. Beaujon v. Hebrew Homes Health Network, Inc., et al., Case No. 12-20951 CIV (S.D. Fla.).
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.