An Oklahoma company that provides home healthcare through subsidiaries in multiple states and two of its former corporate officers have agreed to pay $22,948,004 to resolve allegations that the company wrongfully paid physicians to induce referrals of home health patients under the guise of medical directorships, resulting in the submission of false claims to the Medicare and TRICARE programs.
The settlement resolves allegations that between 2013 and 2020, the company paid remuneration to its home health medical directors in Oklahoma and Texas for the purpose of inducing referrals of Medicare and TRICARE home health patients. The defendants’ alleged conduct resulted in the submission of claims for services provided to these illegally referred patients, in violation of the False Claims Act. The corporate officers were previously the CEO and COO of the company. They agreed to be excluded from participating in Medicare, Medicaid, and all other federal healthcare programs for a period of five years.
Contemporaneous with the civil settlement, the company entered into a five-year Corporate Integrity Agreement (CIA) with the US Department of Health and Human Services—Office of Inspector General (HHS-OIG). The CIA requires, among other things, an independent review organization to evaluate arrangements entered into by or on behalf of the company’s entities. The CIA also increases individual accountability by requiring compliance-related certifications from key executives.
The allegations resolved by the settlement were brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the United States for false claims and to receive a share of any recovery. The whistleblowers also alleged other claims under the False Claims Act and Oklahoma Medicaid False Claims Act.
Separately, on the same date, the defendants also settled a qui tam False Claims Act civil suit filed in the United States District Court for the Southern District of Florida for $7,175,000 to resolve allegations that, from 2014 through 2016, the defendants submitted claims for therapy services without regard to medical necessity and overbilled therapy services by upcoding patients’ diagnoses.
The total amount of the two settlement agreements, with interest, exceeds $30 million.
Issue:
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The Physician Self-Referral Law, commonly known as the Stark Law, prohibits healthcare providers from billing Medicare for certain services referred by physicians with whom the provider has an improper financial arrangement, including the payment of compensation that exceeds the fair market value of the services actually provided by the physician. Both the Anti-Kickback Statute and the Stark Law are intended to ensure that physicians’ medical judgments are not compromised by improper financial incentives and instead are based on the best interests of their patients. Claims submitted under the Anti-Kickback Statute and the Stark Law violate the False Claims Act. Staff who provide skilled services must understand what constitutes reasonable and necessary skilled services. The skilled services must be based upon a patient’s ability, need, and what is reasonable for the patient. Staff should be knowledgeable and aware of what may be considered a false claim. Failure to promptly report a false claim or kickback can result in citations, fines, and other sanctions.
Discussion Points:
- Review policies and procedures for preventing and reporting false claims and kickbacks. Also review your policies and procedures on determining if skilled rehabilitation services are reasonable and necessary. Update as needed.
- Train 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. Provide education to nursing and business office personnel on their responsibility to identify and report any concerns that unnecessary medications, treatments, supplies, or equipment are being ordered for residents. Document that the trainings occurred and place in each employee’s education file.
- Periodically perform audits to ensure all staff are aware of their responsibility to identify and report compliance and ethics concerns and understand that it is their responsibility to report violations to their supervisor, the compliance officer, or via the anonymous hotline. Conduct audits of documentation and billing routinely to prevent and detect errors before they progress to a false claim.
