Home Bound Healthcare: Medical Directors Paid to Bring in Patients

The Home Bound Healthcare civil settlement required the company and its owner to pay $6.8 million to resolve allegations that medical-director kickbacks induced false eligibility certifications and Medicare claims. The contracts gave physicians medical duties. In his separate guilty plea, the company’s president admitted that he paid them for referrals and did not require them to perform those duties. If you recruited physicians, handled their payments or worked with their referrals, that difference between the written job and the job management actually demanded is the heart of this case.

Home Bound was headquartered in Lemont, Illinois, and provided home health care and hospice services. The Justice Department announced the civil settlement and the owner’s guilty plea on September 14, 2016. The president’s criminal plea supplied his own account of how he recruited, paid and retained the doctors who brought patients into the business.

What Is a Kickback Scheme?

A home health kickback scheme pays someone to steer patients to an agency. In his plea agreement, linked from the Justice Department’s announcement, Home Bound’s president admitted paying physicians for Medicare patient referrals under medical-director contracts. He admitted that those contracts existed solely to obtain referrals for home health and hospice services and that he used them to conceal the payments.

The president and majority owner directed medical-director recruitment and retention across the company’s seven offices in Illinois and Nevada. Each director received a contract listing duties and monthly compensation of $1,000 to $4,000. What mattered in practice was how many patients the physician sent to Home Bound.

The plea describes a monthly management routine. The president tracked each director’s referrals. When the count was insufficient, he directed employees to obtain more. Directors who failed to bring enough patients could lose the position:

We see a sales target dressed as a medical position. Duties optional. Referrals not. For the employee administering those contracts, the instruction to chase patients explains the payment more clearly than the title on the agreement.

The admitted arrangement ran from approximately December 2006 through September 2014 and involved about 20 medical directors. The president paid $789,327 in kickbacks. The plea reports approximately 2,797 Medicare claims and approximately $9,875,136 in reimbursement associated with the home health and hospice referrals, compared with the $6.8 million civil settlement. The payments to physicians bought access to a much larger stream of Medicare reimbursement.

The disguise has a familiar counterpart in sham marketing arrangements that pay recruiters for patients. Home Bound put the paid referral relationship inside a physician’s contract. The director title made the relationship look clinical while the admitted performance measure was patient volume.

How the Referrals Became Medicare Claims

The government alleged that Home Bound’s kickbacks induced false certifications of eligibility for home health services, which the company then used to submit Medicare claims. The alleged connection ran from the payment to the physician through the clinical certification to the agency’s bill.

The home health certification chain gives that connection its importance. Medicare home health requires homebound status, qualifying skilled need, a plan of care, practitioner oversight and supporting certification and encounter evidence. A referral brings a patient to the agency. The certification addresses whether that patient qualifies for the benefit.

Homebound status itself rests on the patient’s circumstances. The Centers for Medicare & Medicaid Services’ home health coverage manual describes the need for assistance, a device or special transportation because of illness or injury, or a medical reason to avoid leaving home. The patient must also normally be unable to leave, with departure requiring considerable and taxing effort.

Inside the agency, the assessment, plan and visit notes carry the clinical account forward. Billing turns that account into a claim, and the payment record shows what Medicare paid. Those records can pass through different hands. The physician recruiter may know why the contract was renewed. The nurse may know the patient’s condition. The billing worker may know which claims followed the referral.

In a case about unnecessary home health care, the patient’s skilled need and the services billed are central. Home Bound’s civil allegations joined the eligibility question to the financial relationship: the government said the payment helped produce the false certification. An insider who understands both sides can explain why a signed form reached the billing department in the first place.

When Patients Need Care and the Referral Is Still Bought

The criminal case against a physician paid by Grand, a home health agency, shows why the financial relationship deserves its own attention. The Seventh Circuit’s account of the criminal case describes the agency paying a physician $400 for each new-admission form and $300 for each recertification. The patients needed home health care and independently chose among agency brochures. The court treated the paid certifications and recertifications as referrals.

That comparison matters to an employee who saw both care and payments. The patient’s clinical need and the money paid for the physician’s signature answer different questions. The Home Bound president’s plea described contracts buying referrals; Grand’s case showed payments attached to admission and continuing-care forms. In each, the transaction reached someone whose signature helped open the way to Medicare payment.

What the Corporate Settlement Required

The civil settlement required changes to the owner’s relationship with Home Bound as well as a payment. According to the Justice Department’s announcement, the owner agreed to resign immediately, refrain from seeking future employment with the company and divest his ownership within 120 days of formal entry of the agreement.

Home Bound also entered a corporate integrity agreement with the Department of Health and Human Services Office of Inspector General. It required the company to establish a compliance program with policies, procedures and practices addressing federal health care program requirements. The Justice Department reached the civil settlement on behalf of the HHS Office of Inspector General.

What Evidence Is Needed to Prove Fraud?

We examine medical-director contracts, the work actually expected, payment records and the referrals that led to Medicare claims. Home Bound makes the management decisions especially revealing: the president admitted monitoring referrals and directing employees to obtain more, while leaving the written medical duties unenforced.

Payment records show what the physician received. Referral tracking and instructions to employees show what management wanted in return. A decision to retain or terminate a director can explain which obligation the company actually valued. The clinical records and claims then show where those referrals led.

An employee’s knowledge gives those records meaning. Someone responsible for physician relationships may understand why management called about a particular director. Someone in intake may recognize the referred patients. A nurse or billing worker may see the certification and the care claimed for them. We connect those perspectives so the account explains the business decision as well as the paperwork.

How Much Does Medicare Fraud Whistleblower Pay?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. If you know why physicians were paid and how their referrals became claims, our whistleblower experts can assess that knowledge with you and build the case around the decisions you saw.

You Know What the Director Was Paid to Do

If management expected patients from a physician whose contract promised medical services, talk with our whistleblower experts about the arrangement you saw. We build your strongest case with you and bring in home health fraud whistleblower lawyers who understand physician compensation, eligibility certifications and Medicare claims. We stay beside you as partners throughout the case, with your knowledge of the business at its center.