Anti-Kickback and Stark

May 18, 2017

Missouri health care providers Mercy Hospital Springfield and its affiliate Mercy Clinic Springfield Communities agreed to pay $34 million to settle charges they violated the False Claims Act by engaging in improper financial relationships with referring physicians.  The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by former Mercy physician Dr. Viran Roger Holden.  Dr. Holden will receive a whistleblower award of $5,440,000 from the proceeds of the government's recovery. DOJ

April 28, 2017

New Jersey-based Quest Diagnostics Inc. agreed to pay $6 million to resolve charges that Berkeley HeartLab Inc., which Quest acquired in 2011, violated the False Claims Act by paying kickbacks to physicians and patients to induce the use of Berkeley for blood testing services and by charging for medically unnecessary tests. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Dr. Michael Mayes. He will receive a yet-to-be-determined whistleblower award from the proceeds of the government's recovery. DOJ

April 27, 2017

Indiana University Health Inc. (IU Health) and HealthNet Inc. agreed to pay a total of $18 million to resolve allegations they violated the False Claims Act by engaging in an illegal kickback scheme related to the referral of HealthNet’s OB/GYN patients to IU Health’s Methodist Hospital. According to the government, IU Health provided HealthNet with an interest-free line of credit, the balance of which consistently exceeded $10 million. The government further charged that HealthNet was not expected to repay a substantial portion of this loan and that this financial arrangement was intended to induce HealthNet to refer its OB/GYN patients to IU Health’s Methodist Hospital. DOJ

April 25, 2017

Braden Partners, L.P. (d/b/a Pacific Pulmonary Services) agreed to pay $11.4 million to resolve allegations against it and its general partner, Teijin Pharma USA LLC, for violating the False Claims Act by submitting claims for reimbursement to Medicare and other federal healthcare programs for oxygen and related equipment supplied in violation of program rules, and for sleep therapy equipment supplied as part of a cross-referral kickback scheme with sleep clinics. According to the government, Pacific Pulmonary submitted claims to the Medicare, TRICARE and Federal Employee Health Benefits programs for home oxygen and oxygen equipment without obtaining the required physician authorization. The government further charged that certain of the company’s patient care coordinators agreed to make patient referrals to sleep testing clinics in exchange for those clinics’ agreement to refer patients to Pacific Pulmonary for sleep therapy equipment in violation of the Anti-Kickback Act. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act by Manuel Alcaine, a former sales representative of Pacific Pulmonary. Mr. Alcaine will receive a whistleblower award of roughly $1.8 million from the proceeds of the government's recovery. DOJ

April 18, 2017

International Tutoring Services, LLC (d/b/a Hospice Plus; Goodwin Hospice, LLC; Phoenix Hospice, LP; Hospice Plus, L.P.; and Curo Health Services, LLC) agreed to pay $12.21 million to resolve allegations they violated the False Claims Act by paying kickbacks in exchange for patient referrals. The alleged kickbacks took the form of cash, gift cards, sham loans, a free equity interest in another entity, stock dividends, and free rental space. The allegations originated in a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act. The whistleblowers will receive a whistleblower award from the proceeds of the government's recovery. DOJ (NDTX)

March 30, 2017

Godwin Oriakhi, owner of five Houston-area home health agencies pleaded guilty to conspiring to defraud Medicare and the State of Texas’s Medicaid-funded Home and Community-Based Service and Primary Home Care programs of more than $17 million.  According to his plea, Oriakhi admitted that he, his daughter and co-defendant Idia Oriakhi, and other members of his family owned and operated: Aabraham Blessings LLC, Baptist Home Care Providers Inc., Community Wide Home Health Inc., Four Seasons Home Healthcare Inc. and Kis Med Concepts Inc., and that they obtained patients for these home health agencies by paying illegal kickback payments to patient recruiters and his office employees for hundreds of patient referrals.  Oriakhi also admitted that they paid Medicare and Medicaid patients by cash, check, Western Union and Moneygram for receiving services from his family’s home health agencies in exchange for the ability to use their Medicare and Medicaid numbers to bill the programs for home healthcare. DOJ