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Moorestown Home Health Agency Operator to Pay $17M to Resolve Kickback Allegations


A home health agency (HHA) operator has agreed to pay $17 million to resolve allegations that it violated the False Claims Act by paying kickbacks through the purchase of two HHAs from a retirement home operator in Arizona, Acting U.S. Attorney Rachael A. Honig and Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division announced today.

Today’s settlement resolves allegations that BAYADA, BAYADA Home Health Care Inc., BAYADA Health LLC, and BAYADA Home Care (collectively, the BAYADA Companies), with headquarters in Moorestown, bought two HHAs to induce referrals to BAYADA of Medicare beneficiaries from other retirement communities operated by the seller throughout the United States. 

The government alleges that from January 1, 2014, through October 31, 2020, the BAYADA Companies submitted false claims for payment to Medicare for services provided to beneficiaries referred to BAYADA as a result of the kickback transaction.

“When healthcare providers make or induce referrals that are based on kickback arrangements rather than the best interests of patients, they risk patient harm, threaten the integrity of federal healthcare programs, and violate federal law,” Acting U.S. Attorney Honig said. 

“The U.S. Attorney’s Office for the District of New Jersey and our partners in the Department of Justice and at HHS-OIG will continue to pursue those who, like BAYADA, offer kickbacks for patient referrals, no matter the disguise those kickback arrangements might wear.”

“Parties who pay or receive kickbacks in order to induce referrals undermine the integrity of the health care system,” Acting Assistant Attorney General Boynton said. 

“This resolution reflects the department’s commitment to protecting the right of federal health care program beneficiaries to receive medical care that is not influenced by the financial interests of their health care providers.”

The Anti-Kickback Statute prohibits parties who participate in federal health care programs from knowingly and willfully offering, paying, or receiving any remuneration to induce the recommendation of any item for which payment is made in whole or in part under a covered federal health care program.

The prohibition extends to asset purchases that are intended to induce referrals.

The civil settlement includes the resolution of claims brought under the qui tam, or “whistleblower” provisions, of the False Claims Act by David Freedman, the former director of strategic growth for BAYADA between 2009 and 2016. 

Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. As part of today’s resolution, Mr. Freedman will receive more than $3 million. 

The matter remains under seal as to allegations against entities other than the BAYADA Companies.