On May 23, the Department of Justice announced that Village Home Care LLC (VHC) agreed to pay $225,000 to resolve allegations that it violated the False Claims Act (FCA). According to the government’s allegations, VHC paid kickbacks to two physicians in the form of sham medical director or sublease agreements in exchange for patient referrals. As part of separate agreements, the CEO of VHC agreed to pay $105,000 and two other doctors who allegedly received kickbacks agreed to pay $161,943.
“Paying doctors to refer patients for services paid for by federal health care programs can distort medical decision-making and result in medically unnecessary care,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The settlements in this matter demonstrate our commitment to protecting the integrity of these programs and the taxpayer dollars that support them.”
The alleged FCA violations were uncovered by the whistleblowers Kasey Jacobs, James Hanes, Katherine Brooks, Karen Swain, and Barbara Mellot-Yezman, all former employees of VHC. The whistleblowers filed under the qui tam provision of the FCA. Qui tam claims enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery. The whistleblowers’ share in this case has not been finalized as of this reporting.
The Department of Justice’s statement emphasized the importance of the FCA as “one of the most powerful tools” to combat healthcare fraud. U.S. Attorney Roger Handberg stated that “Medicare funds should be used to provide care for our seniors, not to induce physicians to refer business.” He added that “this office will take action against individuals who make unlawful payment to physicians in exchange for patient referrals.”
On June 1, the Supreme Court issued an unanimous ruling in a landmark False Claims Act case which whistleblower advocates say will help ensure the future efficacy of the law in fighting fraud.
