Home health agency, former execs to pay $5.8 million to settle false claims allegations

Writer: Derrick Shaw
Scale of justice. (Credit: MGN)
(Credit: MGN)

A home health agency with offices in Southwest Florida and two of its former executives will pay a total of $5.825 million to resolve allegations of false claims.

The Department of Justice said Tuesday that Doctor’s Choice Home Care, Inc., will pay a total of $4,531,000, while former executives Timothy Beach and Stuart Christensen will each pay $647,000.

The company was accused of providing improper financial inducements to referring physicians through sham medical director agreements and bonuses to physicians’ spouses who were Doctor’s Choice employees, the DOJ said. Doctor’s Choice employees are also believed to have pressured clinical personnel to increase the number of home visits for Medicare patients to avoid the Medicare Low Utilization Payment Adjustment that would have decreased the reimbursement Doctor’s Choice received from Medicare in the absence of these unnecessary services.

Doctor’s Choice is a home health agency based in Sarasota, with its Southwest Florida offices in Fort Myers, Naples, Port Charlotte and Englewood. Beach and Christensen founded Doctor’s Choice and formerly served as its top executives.

“Operating an illegal referral scheme and providing medically unnecessary services places patients at risk and jeopardizes millions of taxpayer dollars,” said Michael McPherson, special agent in charge of the FBI Tampa Division. “This settlement highlights the FBI’s commitment to protect the integrity of the federally funded healthcare system.”

From the DOJ:

The Anti-Kickback Statute prohibits the offering or payment of remuneration to induce or reward referrals for services paid for by federal healthcare programs. The Stark Law forbids certain medical providers, including home health agencies, from submitting claims to Medicare for services provided to patients who were referred by a physician with whom the provider has a prohibited financial relationship, unless that relationship falls within an applicable exception.

This settlement resolves allegations that Doctor’s Choice, Beach, and Christensen violated the Anti-Kickback Statute and the Stark Law by entering into sham medical director agreements with physicians as a means of providing remuneration for referrals, and also violated the Stark Law by providing bonuses to employees based on referrals to Doctor’s Choice by the employees’ physician spouses. In addition, the agreement resolves allegations that Doctor’s Choice provided unnecessary services to Medicare patients in order to increase the number of skilled service visits provided during a home health episode to avoid the Low Utilization Payment Adjustment which otherwise would have decreased Doctor’s Choice Medicare reimbursement. This adjustment is triggered when a home health patient has a treatment episode consisting of less than five skilled service visits and results in the provider receiving a standardized per visit payment rather than the higher payment for a full home health episode.

The allegations resolved in this settlement were originally brought in two lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act; one case was filed by Corina Herbold and the second case was filed by Sara Billings, Misty Sykes, and Marina Eschoyez-Quiroga, all of whom are former employees of Doctor’s Choice. The Act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. Ms. Billings, Ms. Sykes, and Ms. Eschoyez-Quiroga will jointly receive a share of approximately $145,000 arising from the Government’s recovery for the Low Utilization Payment Adjustment allegations. Ms. Herbold’s share has not yet been determined.

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

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