Recovery Home Care: Paying for Chart Reviews, Allegedly Buying Referrals

In the Recovery Home Care kickback settlement, the company and its purchaser agreed to pay $1.1 million over allegations that physician chart-review payments bought Medicare referrals. The former owner later reached a separate agreement. For an employee who knew which doctors reviewed charts, who approved their pay and where the patients came from, the alleged mismatch was concrete: compensation described as payment for quality reviews, with referrals as its real purpose.

Recovery Home Care provided home health care to Medicare beneficiaries from its headquarters in West Palm Beach, Florida. A former employee brought the False Claims Act case, and the government joined part of it. The allegations reached both the agency’s physician arrangements and the former owner’s alleged role in directing them.

What Is a Kickback Scheme?

A kickback scheme can hide payment for referrals inside an apparently ordinary business arrangement. From 2009 through 2012, Recovery Home Care allegedly paid dozens of physicians thousands of dollars per month to review patient charts. The government alleged that the doctors received excessive compensation for the work they performed and that the money induced them to refer patients to the agency.

The later Justice Department announcement about the former owner described sham medical-director positions supposedly devoted to quality reviews. Its account of the government’s lawsuit put the alleged mismatch plainly:

The government said the agency was buying access to the physicians’ patients. We would call that a referral expense. Quality review, on paper.

For someone inside the business, the work behind the title is the revealing part. A medical-director agreement describes what the physician is supposed to do. The charts reviewed and the work recorded show what the agency received. Comparing those with the payments and referrals puts the business explanation beside the activity it supposedly paid for.

What Is Kickback in Healthcare?

A kickback in healthcare is a payment or benefit intended to induce referrals or business paid for by a federal health care program. In Recovery Home Care’s case, the government alleged that physician compensation served that purpose: the agency paid doctors, the doctors referred Medicare patients, and the agency billed for home health services.

The Justice Department identified both the Anti-Kickback Statute and the Stark Law in the allegations. The alleged connection between the physician payments and the Medicare claims made this a False Claims Act case.

That connection runs through the home health certification chain. The referral brings the patient to the agency. The clinical and billing records carry the request for Medicare payment forward.

For an insider describing a physician arrangement, we look at both sides of that relationship: what the physician received from the agency and the care the agency billed after the referral. The physician’s compensation file and the patient’s clinical file tell different parts of the same business relationship.

The Company Settlement Followed a Change of Ownership

National Home Care Holdings LLC bought Recovery Home Care Inc. and Recovery Home Care Services Inc. on October 9, 2012. The Justice Department placed that purchase after the conduct covered by the company settlement.

The corporate resolution, announced March 9, 2015, covered the Recovery companies and their purchaser. The government pursued the former owner separately.

The ownership change matters to an employee’s account of the arrangement. Who controlled physician compensation during the alleged scheme? Who operated the agency when the case settled? Here, the government placed the conduct before the purchase and pursued the former owner separately.

The Former Owner’s Agreement Required Bankruptcy Approval

On March 2, 2016, the Justice Department announced that Recovery Home Care’s former owner, operator and sole shareholder had agreed to pay $1.75 million, subject to approval by the Bankruptcy Court for the Southern District of Florida. The agreement addressed allegations that he caused the companies to pay doctors for Medicare referrals.

The government’s account placed him at the center of the arrangement. It alleged that he spearheaded the scheme involving the medical-director positions and payments for supposed chart reviews. The case therefore followed the alleged decision-maker as well as the companies that paid the physicians.

The former employee’s whistleblower case connected the resolutions. The company announcement allocated a share of the company settlement to that employee. The later announcement provided for a further share from the former owner’s settlement proceeds.

What Evidence Is Needed to Prove Fraud?

For an allegation about chart-review pay buying referrals, the useful evidence connects compensation, actual work, referrals and resulting Medicare claims. We examine those connections with the insider who knows how the arrangement operated. A payment ledger shows money leaving the agency. The physician’s work and referral records help explain what the payment bought.

The agreement and work records make the first comparison concrete. What reviews did the physician undertake? What work supported the monthly compensation? Who approved the payments? An employee involved in the reviews may know which charts reached the physician, how much time the reviews took, what feedback came back and whether anyone followed up when the expected work went unfinished.

Referral and admission records carry that comparison into the agency’s patient business. Those records connect patients referred by the paid physician to the care billed to Medicare.

The clinical record adds another view. Certification, the assessment, the plan of care and the visits document different parts of the care being billed. An OASIS assessment’s payment inputs belong in that comparison because assessment information and claim diagnoses contribute to payment. The claim and Medicare remittance show what the agency submitted and what Medicare paid.

Those records can sit with different people. An employee familiar with physician payments may know little about the visits, while someone reviewing patient files may never see the compensation agreement. We work across those views to understand the arrangement and its connection to claims. Your knowledge of the work helps us understand what the payment record alone leaves unanswered.

A Plus Used a Different Job Description

A Plus Home Health Care offers a close comparison. In the government’s account of that case, the agency allegedly employed physicians’ spouses in nominal marketing jobs requiring little or no real work. The compensation and referral expectations allegedly induced the physicians to send Medicare patients to A Plus.

Recovery Home Care’s alleged conduit was payment to the physicians themselves for chart reviews. A Plus allegedly used the spouses’ marketing jobs. Both accounts turn on the gap between the work described and the referral business the government said the compensation sought to obtain.

The comparison also connects to sham marketing and patient-recruiter arrangements. The recipient, the work and the source of the patients tell us what sat behind the job description.

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. Recovery Home Care’s case began with a former employee who used the law’s qui tam provisions. The employee’s view inside the agency brought the physician-payment allegations into a case that reached both the companies and the former owner. If you know how physician pay connected to referrals at your agency, we can assess that account with you.

You Know Who Did the Chart Reviews

If the physician payments you saw bore little resemblance to the work performed, speak to one of our whistleblower experts about those payments and referrals. We build your strongest home health whistleblower case with you around the compensation and Medicare claims, bring in home health fraud whistleblower lawyers who know these arrangements, and stay beside you throughout.