Retirement Home False Claims Act Violations
Watermark Retirement Communities LLC, a senior living community operator, paid $4.25 million to settle allegations that it violated the False Claims Act. The allegations included that Watermark billed Medicare and Medicaid for unnecessary rehabilitation services, offered discounts and other incentives to physicians who referred patients to Watermark’s facilities, and failed to comply with other federal healthcare laws. The settlement underscores the importance of compliance with federal healthcare laws and the role of whistleblowers in bringing cases of healthcare fraud to light.
The United States alleged that from Jan. 1, 2014 through Oct. 31, 2020, Watermark and an HHA operator engaged in a kickback scheme to induce referrals of Medicare beneficiaries. The scheme involved Watermark selling two of its HHAs to the operator and then causing the operator to submit false claims to Medicare for services provided to beneficiaries referred as a result of the kickbacks. The Antikickback Statute prohibits this type of activity.
“It is imperative that decisions about the care provided to federal health care beneficiaries are not undermined by the payment of kickbacks,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s resolution demonstrates that the Department is committed to holding accountable not only those who offer kickbacks but also those who receive them.”
“Whether you pay them or receive them, kickbacks undermine the integrity of our health care system,” said U.S. Philip R. Attorney Sellinger for the District of New Jersey. “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.”
The resolution was a result of coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the District of New Jersey, with assistance from the Department of Health and Human Services Office of Inspector General.
What are Kickbacks?
Kickbacks are payments made to an individual or company in exchange for referrals or business. Such payments go against ethical regulations and have legal implications. One common way that kickbacks can occur in the pharmaceutical industry is through gifts and incentives given to healthcare providers to encourage them to promote or prescribe a certain brand or product.
Why are Kickbacks Dangerous?
Kickbacks pose significant dangers to patients’ health and their access to quality care. Healthcare providers who receive kickbacks may prioritize their financial gain over patients’ needs, leading to unnecessary prescriptions, treatments, and procedures. Kickbacks also drive up healthcare costs and reduce the quality of care provided to patients, as treatment options are selected based on financial rewards rather than clinical outcomes.
How Pharmaceutical Reps Can Prevent Kickbacks?
Pharmaceutical reps play a crucial role in preventing kickbacks in the industry. Here are some ways they can do so:
Know the Regulations: Reps should familiarize themselves with the regulations that govern the pharmaceutical industry to avoid breaching ethical standards. Look out for anti-kickback laws that regulate the interactions between pharmaceutical companies and healthcare providers.
Focus on Education: Rather than offering gifts, incentivize healthcare providers to engage with reps through educational materials, informative events, and interactive discussions. Developing a sustained relationship based on quality care helps build trust between patients and providers.
Focus on Relationship Building: Reps should prioritize building strong relationships with healthcare providers based on trust, transparency, and respect for medical decisions. This approach will foster a commitment to providing good patient care that supersedes any financial considerations.
Report Breaches: In the event of any suspected kickbacks, pharmaceutical reps should report them to the regulatory bodies mandated to oversee kickbacks. Immediate reporting ensures that the violators are held accountable and that the issue is addressed before it is too late.