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Miami SNF settles $17M fraudulent referrals case

June 17, 2015
by Megan Combs, Associate Editor
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In the largest settlement involving alleged violations of the Anti-Kickback Statute in U.S. history, Hebrew Homes Health Network out of Miami-Dade County, Fla., has agreed to pay $17 million to settle a fraudulent referral case, according to the U.S. Department of Justice (DOJ). Hebrew Homes provides skilled nursing services at seven rehab and skilled nursing facilities (SNF) in the county.

Hebrew Homes was accused of improperly paying doctors for referrals of Medicare patients in need of skilled nursing care. The scheme started in 2006 when Hebrew Homes hired several doctors apparently as medical directors pursuant to contracts that identified job duties and hourly requirements. These medical directors were on hand at several facilities and were each paid several thousand dollars monthly, the DOJ reports.

When on the job, the medical directors performed few, if any, of their contracted job duties, but were paid for referrals to Hebrew Home facilities. The scheme lasted through 2013. It was brought to light by Hebrew Homes' former Chief Financial Officer Stephen Beaujon, who was awarded $4.25 million for suing the company under the whistleblower provision of the False Claims Act.

“Illegal inducements paid to physicians in exchange for patient referrals will not be tolerated,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division in the DOJ press release. “Medicare funds should be used to provide care for our senior citizens, not as an inducement to physicians to refer business.”

As part of the settlement, Hebrew Homes Executive Director William Zubkoff agreed to resign and the company entered into a five-year agreement with HHS-OIG to change its policies on hiring and retaining medical directors.

“Hebrew Homes’ intricate kickback scheme in this record-setting case threatened the impartiality of physician referrals, the financial integrity of Medicare and the public’s trust in the health care system,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) in the release.  “Our agency will continue to investigate nursing homes and other healthcare providers that seek to illegally boost profits at the expense of federal healthcare programs.”

Read the full DOJ press release here.