A Look At Recent Settlements In Healthcare Fraud Kickback Schemes

Healthcare fraud remains a significant concern in the U.S., as demonstrated by recent settlements involving seven individuals and entities accused of violating the Anti-Kickback Statute and the False Claims Act. The Justice Department announced that these parties, including laboratory marketers, physicians, and a medical practice owner, agreed to pay over $1.1 million to resolve allegations of engaging in illegal kickback schemes.
The settlements highlight the ongoing efforts to combat healthcare fraud and uphold the integrity of taxpayer-funded programs like Medicare and Medicaid.
For healthcare providers facing allegations of fraud, consulting a Florida healthcare kickbacks lawyer is critical. Understanding the complex web of healthcare regulations and building a robust defense can make the difference between preserving a career and facing severe penalties.
What are Kickback Schemes in Healthcare?
A kickback scheme in healthcare involves offering, paying, soliciting, or receiving financial incentives to influence referrals for services or items covered by federally funded healthcare programs. The Anti-Kickback Statute (42 U.S.C. § 1320a-7b) explicitly prohibits such practices to ensure that medical decisions are made based on patients’ best interests rather than financial gain. Violations of this statute can lead to severe consequences, including fines, exclusion from federal healthcare programs, and civil liability under the False Claims Act.
In this case, marketers allegedly paid kickbacks to doctors, disguised as investment returns, in exchange for referring patients to specific laboratories for testing. These referrals led to fraudulent claims submitted to Medicare, resulting in substantial financial losses to the government.
Details of the Recent Settlements
The recent settlements resolve allegations against multiple parties who participated in kickback arrangements:
Marketers’ Settlements
Two marketers, Shahram Naghshbandi and John Bello, allegedly paid illegal kickbacks to healthcare providers in exchange for referrals to laboratories in New Jersey, Texas, Virginia, and Florida.
- Naghshbandi agreed to pay $400,000 and was excluded from federal healthcare programs for ten years.
- Bello, along with his company RiteRx4U LLC, agreed to pay $140,000 for disguising kickbacks as investment returns.
Healthcare Providers’ Settlements
Several healthcare providers allegedly received kickbacks for ordering unnecessary tests:
- Dr. Abbesalom Ghermay agreed to pay $228,482 for receiving kickbacks through a purported management service organization (MSO).
- Dr. James Cook and his practice agreed to pay $206,987 for accepting payments disguised as investment returns.
- Dr. Daniel Theesfeld and his practice settled for $99,125 for similar allegations.
Troy Belton, owner of Advantage Medical Group, agreed to pay $63,320 for receiving kickbacks related to laboratory referrals.
Why Kickback Schemes are Harmful
Kickback schemes undermine the integrity of healthcare systems in several ways:
Compromised Patient Care: When medical providers accept financial incentives for referrals, they may prioritize profit over patient welfare. This can lead to unnecessary tests, procedures, or treatments that do not benefit the patient and may even pose risks to their health.
Increased Costs: Fraudulent claims for unnecessary services inflate healthcare costs, burdening taxpayers and draining resources from legitimate patient care.
Erosion of Trust: Trust is a cornerstone of the healthcare system. Kickback schemes erode public confidence in medical providers and institutions, making patients question whether their care is driven by genuine medical need or financial motives.
Legal Tools for Combating Healthcare Fraud
The U.S. government relies on several statutes to combat healthcare fraud, including:
Anti-Kickback Statute: This criminal statute imposes penalties on individuals or entities that offer or receive remuneration to induce referrals for services covered by federal healthcare programs. Violators may face fines, exclusion from federal programs, and imprisonment.
False Claims Act (31 U.S.C. §§ 3729-3733): The False Claims Act allows the government to seek civil remedies for fraudulent claims submitted to federal programs. Under the act, violators can be liable for up to three times the damages sustained by the government, plus substantial per-claim penalties. Additionally, the False Claims Act includes a whistleblower provision, encouraging individuals to report fraud by offering them a percentage of any recovered funds.
Exclusion from Federal Healthcare Programs: Individuals or entities found guilty of fraud can be excluded from participating in federal healthcare programs like Medicare and Medicaid. This exclusion can have devastating effects on a provider’s ability to practice and generate revenue.
How The Justice Department Pursues Healthcare Fraud
The settlements in this case were the result of a coordinated effort by the Civil Division’s 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 (HHS-OIG). These agencies work together to investigate and prosecute healthcare fraud, ensuring accountability for those who violate the law.
Since the inception of efforts to combat healthcare fraud, the government has recovered over $53 million related to MSO kickback schemes, including settlements with 48 physicians. These recoveries illustrate the government’s commitment to protecting taxpayer-funded programs from abuse.
The Importance of Compliance in Healthcare
This case highlights the importance of compliance in the healthcare industry. Providers must prioritize ethical practices and adhere strictly to regulations governing patient care and financial relationships. Kickback schemes not only result in severe legal consequences but also harm patients, increase healthcare costs, and erode public trust.
Contact The Baez Law Firm
If you or your practice are facing allegations of healthcare fraud or kickback violations, The Baez Law Firm can provide expert legal guidance and defense. Our team has extensive experience in complex healthcare litigation and is dedicated to protecting your rights and reputation. Contact us today for a consultation and let us help you navigate the legal process with confidence.
Sources:
justice.gov/opa/pr/marketers-and-healthcare-providers-texas-virginia-and-south-carolina-agree-pay-over-11m
law.cornell.edu/uscode/text/42/1320a-7b
law.cornell.edu/uscode/text/31/subtitle-III/chapter-37/subchapter-III