Bayada, a national health company based in Moorestown, agreed to pay $ 17 million to settle allegations of illegal kickbacks in exchange for patient referrals, U.S. Justice Department officials said Wednesday.
A whistleblower lawsuit filed in New Jersey in 2017 alleged that Bayada had acquired two home health agencies in Arizona from an elderly community operator three years earlier to arrange nationwide referrals from Medicare home health care beneficiaries to the vendor’s retirement facilities.
Details of the alleged kickbacks – from early 2014 to October 2020 – were not available as the original lawsuit remained under lock and key on Wednesday. It was sealed because of allegations against other institutions, said the Ministry of Justice.
Violations of the anti-kickback law need not involve discrete payments. “The ban extends to the purchase of assets that are intended to trigger referrals,” said the Justice Department.
Bayada, which was converted from a for-profit company to a not-for-profit in 2018, denied the allegations in a statement and opted for a settlement “to avoid the significant cost of lengthy litigation and to keep our focus on providing quality home health care for our patients. “
According to its tax return of 990, the company had 2019 sales of $ 1.5 billion. It operates in 22 countries and employs 26,000 people, including abroad.
Bayada’s civil settlement is not an admission of liability, the Justice Department said.
“When health care providers make or initiate referrals that are based on reimbursement agreements and not in the best interests of patients, they risk patient harm, threaten the integrity of federal health programs, and violate federal law,” said Acting New Jersey attorney, Rachael Honig in a press release.
“The US Attorney’s Office for the New Jersey District and our partners in the Department of Justice and in [Health and Human Services-Office of Inspector General] will continue to pursue those who, like Bayada, offer kickbacks for patient referrals, no matter what those kickback arrangements may be. “
The name of the senior housing company that sold the home health agencies to Bayada was blacked out in the settlement agreement.
An April 2014 report in BizTucson said that Bayada acquired Watermark at Home this year. Watermark Retirement Communities, based in Tucson, has 59 locations, including in Blue Bell, Media, Philadelphia, West Chester, and Wilmington, according to Watermark’s website.
When asked for comment, a watermark spokesperson said, “We are currently unable to participate in your article.”
Whistleblower David Freedman receives $ 3.06 million from Bayada’s $ 17 million.
Freedman, who was Bayada’s director of strategic growth from 2009 to 2016, filed a second whistleblower lawsuit against Bayada in 2019. The U.S. government also joined this lawsuit, which focused on Bayada’s undisclosed payment to a lobbyist to aid him in the purchase of Ocean County’s Home Health Agency in 2014.
Freda L. Wolfson, U.S. Chief District Judge for the District of New Jersey, dismissed the case in May, ruling that the allegations did not fall under the Federal False Claims Act, but indicated that they violated state law as stated could have.