Schererville Physician Home Health Referrals: Medicare Paid the Family Agencies

A Schererville physician agreed to pay $2,478,979 in a home health Stark settlement over allegations that he referred Medicare patients to agencies owned by his siblings and their spouses. The government put Medicare’s payments to those agencies at $1,224,489. The settlement bill went to the referring physician. If you work in a physician’s office or a home health agency, the connection between who sends the patient, who owns the agency and who bills Medicare may be the part of the business you know best.

A whistleblower brought the underlying False Claims Act case. The U.S. Attorney’s Office for the Northern District of Indiana investigated and filed a civil complaint, according to its January 9, 2020 announcement. The physician’s settlement followed on December 19, 2022.

Family-Owned Agencies Received the Referrals and the Payments

The government alleged that the physician referred Medicare patients to American Home Health Services, Adarna Home Health Care Services and Amore Home Health Care Services between 2008 and 2014. According to the complaint announcement, all three agencies belonged to members of his immediate family and billed Medicare for patients he referred.

The complaint announcement identified American Home Health Services as a Schererville, Indiana agency owned by the physician’s sister and, during an earlier period, his brother. The government named American, those siblings and the physician in its civil complaint.

According to that announcement, Medicare paid more than 400 claims across the agencies for the physician’s referrals. American accounted for more than 300 claims totaling more than $800,000.

The relationship was the point. In the government’s account, the physician directed patients toward businesses his family owned, and those businesses sought public payment for their care. We see the conflict in that arrangement clearly: a decision carrying the authority of a medical referral also carried business to the family.

The Stark Law Connects Family Ownership to Medicare Payment

The Stark Law restricts Medicare referrals when the physician or an immediate family member has a financial relationship with the provider. Home health services fall within the services the law covers. Both ownership and compensation can create the financial relationship.

In this case, the government alleged that the family ownership made the referrals prohibited and the resulting Medicare claims improper. The government alleged that billing Medicare for those referrals violated the False Claims Act. Its complaint announcement explained the concern in ordinary terms: financial relationships can encourage overuse of services and compromise the physician’s professional judgment.

For an ownership or billing insider, the useful facts include which relative owned which agency, when that ownership applied and which patients arrived through the physician. The dates matter here because the government described the brother’s ownership of American as belonging to an earlier period. We examine the relationship that existed when the referral and the claim occurred. We work through those details with home health fraud whistleblower lawyers who understand physician financial relationships and Medicare claims.

How a Home Health Referral Becomes a Medicare Claim

A home health referral starts a chain of clinical and billing decisions. The certification and plan of care connect the patient’s need for services to the agency’s work and its claim for payment. An insider may see the referral arrive, the certification come back or the claim leave the billing system.

The agency’s assessment records the patient’s condition. The plan identifies services, disciplines, frequency and duration, while visit documentation records the care delivered. The claim and payment records carry the financial result.

In an unnecessary home health care case, the clinical need itself may be disputed. Here, the government’s Stark allegation focused on the financial relationship behind the referrals. The family’s ownership belongs beside the patient’s clinical file when we examine how those claims came about.

Family Compensation Can Also Buy Referrals

A Plus Home Health Care illustrates a different way a physician’s family relationship can enter the referral business. In its account of the A Plus allegations, the Justice Department described physicians’ spouses holding nominal marketing jobs that required little or no real work. The government alleged that compensation and referral expectations induced physicians to send Medicare patients to the agency.

The alleged arrangement paid the spouse while expecting patients from the physician. Someone who worked alongside the spouse may know whether the marketing job involved actual work. Someone in the referring office may know whether the job came with an expectation of sending patients. That knowledge gives the job title a meaning the payroll entry alone cannot.

The connection to sham marketing arrangements is the use of a business label to explain money tied to patients. In the Schererville matter, the alleged financial connection was agency ownership. In A Plus, it was compensation to spouses. The practical question travels between them: how did the family’s financial interest connect to the physician’s referral and the agency’s Medicare claim?

What Evidence Is Needed to Prove Fraud?

Evidence of a prohibited family referral connects the ownership or compensation relationship to particular referrals, certifications, claims and payments. An agency employee may know who actually owned the business. Someone in the physician’s office may know how patients reached that agency. A biller may be able to connect those patients to the claims Medicare paid.

We bring those accounts together. The ownership dates tell us when the financial relationship existed. The referral and certification records identify the physician’s part. The agency’s claims and payment records show where the government money went. Your knowledge of how those decisions were made helps explain what the documents mean. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Who Sent the Patients

If you know how a physician’s family interests shaped the patients arriving at a home health agency, talk with our whistleblower experts about the referrals and claims you saw. We build the case with you, bring in home health fraud whistleblower lawyers who understand ownership and referral arrangements, and stay beside you through the pursuit of a recovery.