Hebrew Homes Plaza Health Network: Medical Director Contracts and the Price of Referrals

Hebrew Homes Plaza Health Network agreed to pay $17 million to settle allegations that medical-director jobs concealed payments for Medicare patient referrals. The Justice Department called it the largest settlement involving alleged Anti-Kickback Statute violations by skilled nursing facilities in the United States at the time. The network’s former chief financial officer brought the whistleblower case.

The Hebrew Homes Plaza Health Network fraud case involved seven rehabilitation and skilled nursing facilities in Miami-Dade County, Florida. Hebrew Homes Health Network was also known as Plaza Health Network. The Justice Department announced the agreement on June 16, 2015.

How the Medical Director Contracts Allegedly Worked

From 2006 through 2013, Hebrew Homes allegedly used medical-director contracts to pay physicians for patient referrals. According to the Justice Department, the facilities had several medical directors under contract at the same time, paying each several thousand dollars a month.

The contracts specified numerous duties and hourly requirements. The government alleged that most of the doctors were required to perform few, if any, of those duties. It described the jobs as ghost positions and said patient referrals increased sharply once the physicians joined the payroll.

The written agreement described a job. The alleged bargain rewarded the doctor for bringing in patients. An insider reading the contract would see one explanation for the money. Someone following the referrals could see another.

The Anti-Kickback Statute prohibits paying for referrals of care covered by Medicare and other federal health care programs. For the patient, the arrangement reached into a decision about where to receive care. DOJ’s concern was that payments to doctors could influence that choice. For taxpayers, it meant Medicare-funded business flowing toward facilities that allegedly paid for it.

What Evidence Is Needed to Prove Fraud?

For a medical-director referral case, the evidence connects the contracted duties, work actually performed, physician payments, patient admissions and resulting Medicare claims. We examine those records together to establish what the facility was paying for and who made that decision.

In Hebrew Homes, the government’s account specifically linked putting doctors on the payroll with an increase in their referrals. That makes the timing useful: when the arrangement began, when the payments started and when the admissions changed. The important comparison is between the job the agreement described and the business the physician actually brought in.

A separate complaint against The Ensign Group makes the gap in work records concrete. In that case, a whistleblower alleged:

It illustrates why an agreement’s hourly language needs to be read alongside the records of the work. A contract can describe a substantial job while the organization’s own recordkeeping leaves the promised services unaccounted for.

People in different parts of a facility can hold different pieces of that comparison. Finance sees compensation and payment approval. Admissions sees where patients come from. Clinical staff see the work done inside the facility. Our job is to connect those accounts to the physician arrangement and the government’s payments, including the decisions behind them.

Why the Settlement Names More Than the Network

The executed settlement agreement names Hebrew Homes Health Network, its former president and executive director, and a broader group of operating, property and management entities.

The agreement includes Arch Plaza, Inc. and Arch Plaza Properties, Inc., as well as Hebrew Homes Management Services, Inc. Those names matter to an insider trying to connect a physician contract with a particular facility and its payments. We trace which entity signed the contract, which paid the physician and which billed Medicare for the patients referred.

Nursing-home businesses can divide operations, property and management among different entities, each receiving a different stream of money.

The California Research Bureau’s 1997 report, Fraud and Abuse in the Health Care Market of California, describes referral kickbacks as one party channeling business toward another for a fee. That is the alleged bargain behind the Hebrew Homes contracts. We follow the patients and payments to identify the role each business played.

What the Settlement Changed

Hebrew Homes agreed to change its policies for hiring and maintaining medical directors and entered into a five-year corporate integrity agreement with the Department of Health and Human Services’ Office of Inspector General. Its former president and executive director also agreed to resign as executive director and cease being an employee.

The hiring changes addressed the arrangement at the heart of the allegations. The government had described jobs with detailed contractual duties and little required work.

What Other Medical Director Cases Show

Other medical-director cases show how referral expectations can shape compensation and hiring decisions, including what happens when the expected referrals fail to arrive.

In the Paksn case announced in 2023, the government alleged that physicians were recruited according to promised admissions, compensation reflected expected referral volume and low-referring physicians were terminated. Those allegations make the hiring and termination decisions part of the evidence. The question reaches beyond what a contract promised to what the business rewarded.

In the Alta Vista Healthcare & Wellness Centre and Rockport Healthcare Services settlement, the government alleged that gifts and monthly medical-director stipends induced physician referrals. Those allegations reach beyond the monthly check to the other benefits a physician received.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In the Hebrew Homes case, the Justice Department announced that the former chief financial officer who brought the qui tam case would receive $4.25 million from the settlement.

You Know What the Physician Was Paid to Do

If you saw medical-director pay follow referrals while the promised work went undone, tell our whistleblower experts what happened inside the facility. We build the case with you around the contracts, payments and admissions, and bring in healthcare fraud whistleblower lawyers who know physician referral arrangements. You have a partner through the whole case, starting with the business decisions you saw firsthand.