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Home Health Agency Operator to Pay $17M to Resolve False Claims Act Kickback Allegations

Court Gavel Image (2020) - USE THIS ONE

By Press Release

NEWARK – A home health agency (HHA) operator, with a Court House location, has agreed to pay $17 million to resolve allegations that it violated the False Claims Act by paying kickbacks through the purchase of two HHAs from a retirement home operator in Arizona, Acting U.S. Attorney Rachael Honig and Acting Assistant Attorney General Brian Boynton of the Justice Department’s Civil Division announced Sept. 8. 

According to a U.S. Attorney’s Office release, the settlement resolves allegations that BAYADA, BAYADA Home Health Care Inc., BAYADA Health LLC, and BAYADA Home Care (collectively, the BAYADA Companies), with headquarters in Moorestown, bought two HHAs to induce referrals to BAYADA of Medicare beneficiaries from other retirement communities operated by the seller throughout the U.S.  

The government alleges that from Jan. 1, 2014, through Oct. 31, 2020, the BAYADA companies submitted false claims for payment to Medicare for services provided to beneficiaries referred to BAYADA as a result of the kickback transaction. 

“When health care providers make or induce referrals that are based on kickback arrangements rather than the best interests of patients, they risk patient harm, threaten the integrity of federal health care programs, and violate federal law,” Honig stated. “The U.S. Attorney’s Office for the District of New Jersey and our partners in the Department of Justice and at HHS-OIG will continue to pursue those who, like BAYADA, offer kickbacks for patient referrals, no matter the disguise those kickback arrangements might wear.” 

“Parties who pay or receive kickbacks in order to induce referrals undermine the integrity of the health care system,” Boynton stated. “This resolution reflects the department’s commitment to protect the right of federal health care program beneficiaries to receive medical care that is not influenced by the financial interests of their health care providers.” 

The Anti-Kickback Statute prohibits parties who participate in federal health care programs from knowingly and willfully offering, paying or receiving any remuneration in order to induce the recommendation of any item for which payment is made in whole or in part under a covered federal health care program. The prohibition extends to asset purchases that are intended to induce referrals. 

The civil settlement includes the resolution of claims brought under the qui tam, or “whistleblower” provisions, of the False Claims Act by David Freedman, who was the former director of strategic growth for BAYADA between 2009 and 2016.  

Under those provisions, a private party can file an action on behalf of the U.S. and receive a portion of any recovery. As part of Sept. 8’s resolution, Freedman will receive more than $3 million. The matter remains under seal as to allegations against entities other than the BAYADA companies. 

The resolution obtained in this matter was the result of a coordinated effort between the U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, with assistance from the U.S. Department of Health and Human Services Office of Inspector General. 

The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477). 

The government is represented by Assistant U.S. Attorney Daniel Meyler, of the Health Care Fraud Unit, in the District of New Jersey, and Trial Attorney Samson Asiyanbi, of the Civil Division. 

The claims resolved by the settlement are allegations only and there has been no determination of liability. 

A request to BAYADA for comment was not returned. 

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