Home Health & Hospice Week

Government-backed lawsuit focuses on kickbacks to physicians.

Are your physician compensation arrangements so clean they shine? If not, a disgruntled employee could bring you to the feds' attention.

That's what happened to Aging Care Home Health Inc. in Monroe, LA, which is facing a qui tam suit the government has taken up.

Former Aging Care nurse and marketing rep Becky Roberts and an employee of one of Aging Care's referring physicians filed a whistleblower complaint in October 2002, accusing the HHA of a laundry list of bad deeds.

The allegations included tracking and billing for referring physicians' care plan oversight services and splitting the proceeds with the docs, providing other kickbacks to physicians, falsely claiming and inflating expenses on cost reports, furnishing visits without doctors' orders, trumping up reasons for visits, and more.

The charges were "weird and unbelievable," insists Aging Care's counsel, Liz Pearson of Covington, KY-based Pearson & Bernard. Roberts is a disgruntled former employee who already has tried to sue the agency for defamation in state court in an unrelated matter, Pearson tells Eli.

But when the government partially intervened in the case in June 2004, it picked up on the physician kickback issue - and that could be enough to cost Aging Care dearly.

Anti-Kickback, Stark Violations Alleged In a November 2004 complaint filed in U.S. District Court for the Western District of Louisiana, the government spells out its charges against the agency, CEO and owner Janice Davis and CFO Otis Davis from 1999 to 2002. Aging Care violated the Anti-Kickback Statute and Stark law by entering into "sham" compensation arrangements with 11 referring physicians, the complaint accuses.

The HHA paid docs up to $800 a month for being on its Advisory Board and entering into physician service agreements that included tasks such as conducting in-services, evaluating staff and evaluating records. But the physicians weren't actually required to perform those duties, and instead were paid varying amounts based on their referral volume, the government alleges.

Aging Care also paid some of the physicians up to $1,000 a month to be a medical director or compliance officer, although they also weren't required to perform any duties, the government charges. The agency would drop docs from the Board or these positions if they didn't refer enough patients, the complaint says.

And Aging Care paid physicians for so-called care plan oversight services to patients, even though the docs performed the same services for other agencies'patients without extra payment, the government alleges.

Aging Care denies the allegations and plans to defend itself vigorously in court, Pearson says. The HHA had valid written contracts with these physicians, as required by Stark, and the agency had only five physicians at a time on the Board, she explains. One Step Further: False Claims [...]