On November 15, the Department of Justice announced that Paksn Inc. and six skilled nursing facilities in California have entered into a $45.6 million consent judgment to settle allegations of submitting false claims to Medicare.
According to the government’s allegations, the defendants entered into medical directorship agreements with specific physicians, under the pretense of offering compensation for administrative services. However, these agreements were allegedly used to provide kickbacks to doctors, in exchange for referring patients to seven skilled nursing facilities (SNFs). Furthermore, the defendants allegedly hired certain physicians who agreed in advance to refer many patients to the SNFs and paid them based on the number of expected referrals. They also allegedly terminated physicians who failed to refer enough patients.
Whistleblower, Trilochan Singh, Paksn’s former Vice President of Operations and Chief Operating Officer, filed a qui tam lawsuit bringing these allegations forward. The False Claims Act‘s qui tam provisions enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. In successful qui tam suits, whistleblowers are entitled to 15-30% of the funds collected by the government.
“Kickbacks can impair the independence of physician decision-making and waste taxpayer dollars,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to preventing illegal financial relationships that undermine the integrity of our public health care programs.”
On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
“The False Claims Act is America’s number one fraud-fighting law,” said whistleblower attorney Stephen M. Kohn. “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”