Whistleblower to get $3 million as Bayada fined $17 million for kickbacks

A home health agency (HHA) operator has agreed to pay $17 million to resolve allegations that it violated the False Claims Act by paying kickbacks through the purchase of two HHAs from a retirement home operator in Arizona, according to U.S. Attorney Rachael A. Honig and Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division.

Today’s settlement resolves allegations that Bayada, Bayada Home Health Care Inc., Bayada Health LLC, and Bayada Home Care with headquarters in Moorestown, New Jersey, bought two HHAs to induce referrals to Bayada of Medicare beneficiaries from other retirement communities operated by the seller throughout the United States.

The government alleges that from Jan. 1, 2014, through Oct. 31, 2020, the Bayada companies submitted false claims for payment to Medicare for services provided to beneficiaries referred to Bayada as a result of the kickback transaction.

“When healthcare providers make or induce referrals that are based on kickback arrangements rather than the best interests of patients, they risk patient harm, threaten the integrity of federal healthcare programs, and violate federal law,” said Honig. “The U.S. Attorney’s Office for the District of New Jersey and our partners in the Department of Justice and at HHS-OIG will continue to pursue those who, like Bayada, offer kickbacks for patient referrals, no matter the disguise those kickback arrangements might wear.”

“Parties who pay or receive kickbacks in order to induce referrals undermine the integrity of the health care system,” said Boynton. “This resolution reflects the department’s commitment to protect the right of federal health care program beneficiaries to receive medical care that is not influenced by the financial interests of their health care providers.”

The Anti-Kickback Statute prohibits parties who participate in federal health care programs from knowingly and willfully offering, paying or receiving any remuneration in order to induce the recommendation of any item for which payment is made in whole or in part under a covered federal health care program.

The prohibition extends to asset purchases that are intended to induce referrals.

The civil settlement includes the resolution of claims brought under the qui tam, or “whistleblower” provisions, of the False Claims Act by David Freedman, who was the former director of strategic growth for Bayada between 2009 and 2016.

Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery.

As part of today’s resolution, Freedman will receive more than $3 million. The matter remains under seal as to allegations against entities other than the Bayada Companies.

The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, with assistance from the U.S. Department of Health and Human Services Office of Inspector General.

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The government is represented by Assistant U.S. Attorney Daniel Meyler of the Health Care Fraud Unit in the District of New Jersey and Trial Attorney Samson Asiyanbi of the Civil Division.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

The qui tam case is captioned: United States ex rel. Freedman v. Bayada Home Health Care, Inc., No. 17-cv-6267 (NLH) (D.N.J.).

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