Home Health & Hospice Week

Chain’s HHA purchases disguised ulterior motives, prosecutors allege.

Two years after Bayada Home Health Care settled a kickback lawsuit for $17 million, the senior living company involved in the case has shelled out another $4.25 million.

Recap: In 2021, Moorestown, N.J.-based Bayada paid $17 million to settle charges that it bought two home health agencies from Watermark Retirement Communities in Arizona in exchange for receiving referrals from Watermark facilities (see HHHW by AAPC, Vol. XXX, No. 33).

Now Watermark has agreed to pay $4.25 million to resolve allegations that it violated the False Claims Act by soliciting and receiving that kickback from Bayada, the Department of Justice says in a release. “The scheme was designed around eight Watermark retirement homes in five states (Arizona, Connecticut, Delaware, Florida and Pennsylvania) where the two companies had overlapping operations,” according to the government.

Whistleblower David Freedman, the former director of strategic growth for Bayada between 2009 and 2016, will receive about $765,000 of the Watermark settlement, the DOJ says. Freedman, whose qui tam suit sparked the investigation, got about $3 million of the earlier Bayada settlement.

“It is imperative that decisions about the care provided to federal health care beneficiaries are not undermined by the payment of kickbacks,” Brian Boynton, head of the Justice Department’s Civil Division, says in the release. The “resolution demonstrates that the Department is committed to holding accountable not only those who offer kickbacks but also those who receive them,” Boynton emphasizes.

“Whether you pay them or receive them, kickbacks undermine the integrity of our health care system,” U.S. Attorney Philip Sellinger says in the release. “Patients need to know the health care referrals they receive are in their best interest, not in the best interest of someone else’s bottom line. Our office will always be on guard to prevent unscrupulous operators from trying to take financial advantage of our health care system,” Sellinger stresses.