This week’s Department of Justice “catch of the week” goes to Hebrew Homes Health Network Inc., a Florida-based operator of rehabilitation and skilled nursing facilities. On Tuesday, the company — along with its former president and executive director William Zubkoff — agreed to pay $17 million to resolve allegations it violated the False Claims Act by improperly paying doctors for referrals of Medicare patients requiring skilled nursing care. It is the largest settlement involving alleged violations of the Anti-Kickback Statute by skilled nursing facilities in the US. See DOJ Press Release.
According to the government, from 2006 through 2013, Hebrew Homes allegedly operated a sophisticated kickback scheme in which they hired physicians as medical directors with specified job duties and hourly requirements. The various Hebrew Home facilities had several such medical directors under contract at any given time, paying each several thousand dollars monthly. The government claimed that in reality these were ghost positions with the medical directors performing few, if any, of their contracted job duties. Instead, they were allegedly paid for their patient referrals to the Hebrew Homes facilities. These referrals increased exponentially once the medical directors were put on the payroll.
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving any kind of compensation to induce referrals for items or services covered by Medicare or any other federal health care program. It is designed to ensure that a physician’s medical judgment is not compromised by improper financial incentives. This central purpose of the statute was highlighted by the government in its announcement of the settlement. Special Agent in Charge George L. Piro of the FBI’s Miami Field Office said: “Illegal kickbacks undermine the integrity of the Medicare system by putting profits in front of patient welfare.” Special Agent in Charge Shimon R. Richmond of the US Department of Health and Human Services’ Office of Inspector General echoed this strong sentiment: “Hebrew Homes’ intricate kickback scheme in this record-setting case threatened the impartiality of physician referrals, the financial integrity of Medicare and the public’s trust in the health care system..”
The allegations against Hebrew Homes first arose in a whistleblower lawsuit filed by Stephen Beaujon, a former CFO of Hebrew Homes, under the qui tam provisions of the False Claims Act. He will receive a whistleblower award of $4.25 million.
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