New York, Nov 17 (IANS): A nursing home chain and its Indian-American owner have agreed to pay $45.6 million in entering a consent judgment with the US Department of Justice (DOJ) to resolve allegations that they paid kickbacks to physicians to induce patient referrals.
Prema Thekkek and the six skilled nursing facilities (SNFs) owned through her company, Paksn Inc, submitted false claims to Medicare, the DOJ alleged in a settlement agreement filed on Wednesday in a California district court.
According to the DOJ, Thekkek and her facilities violated the Anti-Kickback Statute, which prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid and other federally funded health care programs.
From 2009 to 2021, the six SNFs -- under the direction and control of Thekkek and Paksn -- systematically entered into medical directorship agreements with physicians that purported to provide compensation for administrative services, but in reality were vehicles for the payment of kickbacks to induce the physicians to refer patients to the SNFs.
The defendants hired physicians who promised in advance to refer a large number of patients to the SNFs, paid physicians in proportion to the number of their expected referrals and terminated physicians who did not refer enough patients.
On one occasion, a Paksn employee told Thekkek that two physicians were being hired because “they are promising at least 10 patients for $2000 per month”.
To this Thekkek responded, “good job. Make sure they give you patients everyday. (W)e can also expand to other buildings with them, if possible”.
On another occasion, an employee informed Thekkek that the defendants previously had paid a certain doctor “$1,500 each month and he only sendus 2 patients. so we didn’t pay him anything from Jan(uary) onwards".
“The administrators and beneficiaries of the Medicare Program expect that providers will make decisions based on sound medical judgment, not their personal self-interest,” said US Attorney Martin Estrada for the Central District of California.
“As this case demonstrates, our office will take decisive action to address allegations that medical providers are paying or receiving improper financial benefits that could impact care provided to patients.”
Under the settlement, in addition to entering into a $45,645,327.25 consent judgment, the defendants will make scheduled payments to the US of at least $385,000 over the next five years.
That payment schedule was negotiated based on the defendants’ lack of ability to pay, a DOJ release said.
The settlement stems from a whistleblower complaint filed in 2015 by Paksn’s former Vice President of Operations and Chief Operating Officer, Trilochan Singh.
In addition to resolving their False Claims Act liability, the defendants have entered into a five-year corporate integrity agreement with the HHS-OIG (Office of Inspector General, US Department of Health and Human Services) which requires, among other compliance obligations, an Independent Review Organisation’s review of their physician relationships.