Bayada agreed to pay $17 million to settle a lawsuit that alleged the home care company paid kickbacks to a retirement home operator by buying two of its Arizona home health agencies, the Justice Department said Wednesday.
The federal government alleged that Moorestown, New Jersey-based Bayada bought the home health agencies to encourage Medicare beneficiary referrals to Bayada from retirement communities throughout the country operated by the seller. Bayada then allegedly submitted false Medicare claims for services provided to those residents over more than six years.
"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," Rachael Honig, acting U.S. attorney for the District of New Jersey, said in a statement.
Bayada denied the allegations and said in a statement it "entered into a settlement with the federal government to avoid the significant expense of protracted litigation and allow our focus to remain on providing high quality home healthcare to our patients."
"It is important to note that the allegations in this matter do not relate in any way to patient care. All of the care provided to our patients was medically necessary, and neither the relator nor the government have alleged anything to the contrary," Bayada said.
Acting assistant attorney general Brian Boynton of the Justice Department's civil division said kickbacks "undermine the integrity of the healthcare system" and that the Bayada settlement agreement shows the government wants Medicare beneficiaries to receive care without being affected by providers' financial interests.
Bayada didn't admit guilt as part of the settlement agreement.
The company's former director of strategic growth, David Freedman, brought the whistleblower suit against Bayada. He will receive more than $3 million in the settlement.
Bayada provides nursing, rehabilitative, therapeutic, hospice and assistive care services to individuals in their homes and employs more than 26,000 healthcare workers in 22 states and 347 locations.