Skilled Nursing Facility and Management Company Settle Kickback Case for Nearly $4M

A California skilled nursing facility and management company has agreed to pay nearly $4 million to settle allegations it paid kickbacks to physicians for referrals of patients on Medi-Cal and Medicare.

From 2009 through 2019, Alta Vista Healthcare & Wellness Centre, under the direction and control of Rockport Healthcare Services, gave physicians extravagant gifts, including expensive dinners, golf trips, limousine rides, massages, e-reader tablets and gift cards worth up to $1,000.

In addition, Alta Vista paid these physicians $2,500 to $4,000, a month purportedly for their services as medical directors. At least one purpose of these gifts and payments was to induce the physicians to refer patients to Alta Vista in violation of the federal Anti-Kickback Statute, according to the U.S. Department of Justice.

The original whistleblower complaint was brought in 2015 by a former Alta Vista accounting employee, Neyirys Orozco, pursuant to the qui tam provisions of the False Claims Act, which allows private citizens to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. She will receive $581,094 as her share of the federal government’s recovery in this case.

Orozco worked at Riverside, a skilled nursing facility in California, which according to the original complaint, was one facility “within an extremely complex maze of corporations which led back to its owner Shlomo Rechnitz, who is described as the state’s biggest nursing home owner with more than 50 nursing homes under his ownership. He has been the target of several investigations as well as litigation.

According to her complaint, the patients also were incentivized to stay at the SNF as long as possible by giving them whatever they wanted including food, rent payment and waiver of required medical costs. If they tried to leave, the complaint said they were told they would be responsible for the full cost of treatment.

The United States will receive $2.8 million, and California will receive $596,700, based on the proportion of losses to state and federal funds. 

The Health Law Offices of Anthony C. Vitale is known for its representation of whistleblowers, as well as its ability to defend those who become the target of a whistleblower action. For more information call us at 305-358-4500 or email info@vitalehealthlaw.com.