Home Care Entities Reach $1.1 Million Settlement Over Referral Scheme

Recovery Home Care Inc., Recovery Home Care Services Inc. and National Home Care Holdings LLC have agreed to pay $1.1 million to resolve allegations that they paid dozens of doctors for referrals of services provided to Medicare patients, the Department of Justice (DoJ) announced Monday. 

The Recovery Home Care entities provide home health care services to Medicare beneficiaries and were purchased by National Home Care Holdings LLC in 2012 — after the alleged activities occurred.

From 2009 to 2012, Recovery Home Care, headquartered in West Palm Beach, Fla., allegedly paid dozens of physicians thousands of dollars per month to perform patient chart reviews.

According to the government’s lawsuit, the physicians were over-compensated for the work they performed and, in reality, payments to the physicians were used to encourage them to refer their patients to Recovery Home Care, violating the Anti-Kickback Statute and the Stark Law.

The Anti-Kickback Statute and the Stark Law are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare. The Stark Law forbids a home health care provider from billing Medicare for certain services referred by physicians who have a financial relationship with the entity.

The settlement partially resolves allegations made in a lawsuit filed in federal court in Tampa, Fla., by Gregory Simony, a former employee of Recovery Home Care. The lawsuit was filed under whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. Simony will receive $198,000 of the recovered funds.

The government continues to litigate this case against Recovery Home Care’s previous owner, Mark Conklin.

Written by Emily Study

Emily Study