The post-acute care provider admitted no wrongdoing, and claimed that 'many' of the allegations 'commenced long before Post Acute acquired the facilities.'
Pennsylvania-based Post Acute Medical, LLC will pay the federal government, Texas and Louisiana $13.1 million to resolve whistleblower allegations that it knowingly paid physicians and other providers illegal kickbacks for referrals, the Department of Justice said.
DOJ alleged that Post Acute had been running the kickback scheme that involved numerous physician-services contracts with its hospitals that started when the post-acute care provider was founded in 2006.
"Although the purpose of these contracts was ostensibly to retain physicians as medical directors or in other administrative or medical roles, the United States alleged that in reality the company’s payments under these contracts were intended to induce the physicians to refer patients to PAM's facilities," DOJ said.
Prosecutors alleged that Post Acute violated the Anti-Kickback Statute and the Stark Law banning self-referrals by using what it called "reciprocal referral relationships” with unaffiliated healthcare providers such as home health companies, billing Medicare and Medicaid for the services.
"In the course of those arrangements, PAM allegedly referred patients to those other providers with the understanding that those providers would refer other patients to PAM’s facilities," DOJ said.
Post Acute posted a statement on its website noting that the payment resolves allegations that first surfaced in 2012, "raising certain issues related to physician relationships in some of the facilities it had previously acquired."
"Although Post Acute disputes that there were any substantive defects with respect to those relationships from a compliance and documentation perspective, many of which commenced long before Post Acute acquired the facilities, in the interest of moving forward and avoiding continued expense, Post Acute agreed to an amicable resolution with the government which it did not acknowledge any violations of applicable rules," Post Acute said.
Prosecutors offered a different perspective.
C.J. Porter, agent in charge for the U.S. Department of Health and Human Services Office of Inspector General, said the "alleged kickbacks and improper physician relationships threatened the impartiality of medical decision-making and the financial integrity of Medicare and Medicaid."
Under the settlement, Post Acute will pay $13,031,502 to the federal government, $114,016 to Texas, and $22,482 to Louisiana. Douglas Johnson, the whistleblower who initiated the federal complaint, will collect $2.3 million as his share of the federal government's recovery.
The health system has also entered into a five-year corporate integrity agreement with the federal government, which Post Acute called "a positive step in continuing its commitment to all regulatory and compliance obligations."
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
Prosecutors say Post Acute 'reciprocal referral relationships' with unaffiliated providers facilitated kickbacks.
Post Acute says it admitted no wrongdoing, but made the settlement 'in the interests of moving forward.'