Village Home Care: Allegations of Sham Director Jobs and an Unused Office Lease

In the Village Home Care settlement, the Ocala, Florida home health agency agreed to pay $225,000 to resolve allegations that it bought Medicare patient referrals through sham medical-director jobs and an unused office sublease. The government alleged that one physician performed no services and that the agency never used the space it rented through another physician’s practice. For someone who knows the contracts, the work or the office, the question is concrete: what was the agency actually buying?

The Justice Department’s May 23, 2023 announcement reported $490,000 in civil settlements covering the company, its CEO and majority owner, and the two physicians. Former employees brought the whistleblower cases that led to those resolutions.

What Is a Kickback Scheme?

A kickback scheme buys referrals or business paid for by a government healthcare program. In Village Home Care’s case, the government alleged that contracts for a physician’s services and office space concealed payments for patients whose home health care the agency then billed to Medicare.

The alleged exchange ran in both directions. Village paid the physicians, the physicians referred patients, and Village billed Medicare for services to those patients. The government pursued the agency and its owner over the payments and claims, and the physicians over accepting payments for referrals.

Contracts gave those payments a business description. The same question arises with referral payments disguised as marketing: what did the recipient actually do for the money? We see the same problem in both allegations: ordinary business expenses with their business purpose missing. According to the government, the agency was buying referrals, with neither the director’s services nor the use of the office to show for its payments.

The Medical-Director Job and the Referrals

The government alleged that Village paid a physician $50,000 under sham medical-director agreements even though he performed no services. It alleged that the company and its owner knowingly billed Medicare for home health services to patients he referred from November 15, 2012, through November 14, 2014. That physician agreed to pay $100,000 to resolve the allegations that he accepted kickbacks.

The owner’s settlement agreement recounts a whistleblower allegation that the medical director improperly referred all of his Medicare patients to Village. It also recounts another whistleblower complaint’s allegation that Village made monthly payments to that physician in exchange for referrals.

For an agency insider, the useful comparison is the director’s promised duties against the work actually performed. We would examine the agreement, payment records and evidence of the physician’s services, then connect the referrals to the Medicare claims. Someone who handled the payments may know one part of that story. Someone who worked with the supposed director may know another.

A Physician Title Can Hide the Same Exchange Elsewhere

The whistleblower complaint against Amedisys alleged a similar use of physician titles to buy referrals:

The parallel is the alleged substitution of a title for a service. The government’s allegations against Village make the comparison direct: payments under medical-director agreements, no services performed, and referred patients billed to Medicare.

The Allegedly Unused Office Sublease

The government alleged that the other physician received $30,971 through his medical practice under sham sublease agreements for space Village never used. The government alleged that Village and its owner knowingly billed Medicare for home health services to patients he referred from December 1, 2012, through March 5, 2014. The physician agreed to pay $61,943 to resolve the allegations that he accepted kickbacks.

Different paperwork. The same alleged purchase: referrals.

The owner’s settlement agreement also recounts a whistleblower allegation that Village paid physicians for “drop boxes” in exchange for patient referrals. The complaint alleged that those payments led to Medicare claims tainted by kickbacks or inappropriate financial relationships.

We would compare the sublease and rent payments with the agency’s actual use of the premises, then follow the physician’s referrals into the billing records. An employee who knows where the agency operated can bring something to that comparison that the lease alone cannot: an account of whether the office ever served the business paying for it.

The Agency and Its Owner Settled Separately

Village’s CEO and majority owner separately agreed to pay $105,000. The Justice Department said both the company settlement and the owner’s settlement were based on financial ability to pay. The owner’s signed settlement agreement says the government relied on sworn financial disclosures and supporting documents in reaching the agreement.

Former Village employees had brought two qui tam cases, and the government joined parts of those cases. The Justice Department’s Civil Division Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida investigated the cases.

From a Physician Referral to a Medicare Claim

The home health certification chain connects a physician’s referral, a nurse’s assessment and a practitioner’s certification to the Medicare claim. Clinical records must support the patient’s eligibility and the care planned. In Village’s case, the government also looked at the money behind the referral: what the agency allegedly paid the physician to send patients its way.

The owner’s agreement also recounts allegations in both whistleblower complaints that Village billed Medicare for home health care for patients who did not qualify. The referral-payment allegation reaches a different decision inside the business: what the agency paid a source of patients to obtain that business.

For someone inside an agency, those connections give otherwise separate records meaning. A contract describes the proposed work or space. Payments show what the recipient received. Referral and billing records connect that relationship to patients and Medicare claims. We work with the person who knows the arrangement to understand how those pieces fit, including what management knew about the work or space it was paying for.

The Village Home Care Whistleblower Reward

The Village Home Care whistleblower reward had not been determined when the Justice Department announced the settlements. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Whether the Work Happened

If you handled a director’s payments, knew which offices the agency used or saw how physician referrals became Medicare claims, speak to one of our Whistleblower Experts about what the agency was really paying for. We build your strongest home health whistleblower case with you, bring in home health fraud whistleblower lawyers who understand physician-payment arrangements, and stay beside you as the case moves forward.