Owner Sentenced in Million-Dollar Fraud Settlement Spanning Home Health Kickbacks

The owner of a health care business is facing a million-dollar civil settlement, prison time and 20-year Medicare and Medicaid exclusion after being convicted of felony charges relating to illegal kickbacks paid for patient referrals. 

Babubhai Rathod is the ninth person to be convicted of charges in the case, which is the result of a joint federal-state investigation resulting from a whistleblower lawsuit. He was sentenced this week to four years in prison and ordered to pay $950,000 in restitution. 

According to the allegations brought against Rathod, between January 2007 and January 2012, Rathod operated a scheme to pay physicians, mid-level practitioners, and others for patient referrals to medical clinics, physical therapy clinics and home health care agency Lakeshore Home Health Care, Inc., based in Lansing, Michigan. The illegal payments were made in checks and cash disguised as bonuses, mileage reimbursements, and payments under fake contracts services that were never performed. 

Five people have been convicted for referring patients under the scheme; they each face thousands of dollars to be paid in restitution as well as exclusion from the federal Medicare and Medicaid programs for five years. 

“Paying kickbacks for the referral of Medicare or Medicaid patients is a serious crime,” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “Kickbacks inappropriately influence health care practitioners’ medical decision making process, lead to overutilization and/or upcoding of services, and further increase program costs. The OIG will continue to aggressively pursue all available remedies whether criminal, civil or administrative to ensure the integrity of the Medicare and Medicaid programs and protect vital taxpayer dollars.”

Written by Elizabeth Ecker

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Elizabeth Ecker
Director of Content at Home Health Care News
Curious about all things, when not writing about senior housing topics, Liz is an avid explorer of food. She loves trying new recipes, new restaurants and new ice cream flavors. (Current favorite: Goat cheese with red cherries.)