The federal government on Monday joined a lawsuit against the operator of seven skilled nursing facilities in California for allegedly paying physicians for patient referrals.
A whistleblower and the Department of Justice allege that Paksn Inc., owner Prema Thekkek and seven SNFs operated or owned by Paksn or Thekkek hired physicians as medical directors who agreed to refer a larger number of patients to the SNFs, paid those physicians based on the volume of their referrals and fired physicians who did not refer enough patients, while claiming physicians were being paid for administrative services. The False Claims Act lawsuit was filed in the U.S. District Court for the Central District of California.
A Paksn employee allegedly told Thekkek that two physicians were being hired because they had committed to referring 10 patients for $2,000 per month. The defendants could not immediately be reached for comment Tuesday.
"Illegal financial arrangements with physicians can improperly influence the type and amount of healthcare that is provided to patients," Acting Assistant Attorney General Brian Boynton of the Justice Department's Civil Division said in a statement. "The department is committed to redressing the corrupting influence of kickbacks on the medical decision‑making of providers participating in federal healthcare programs."
The complaint against Paksn originally was filed in 2015 by Trilochan Singh, the former COO and vice president of operations at Paksn.
"The payment of kickbacks to physicians for referrals turns patients into commodities that can be traded," Acting U.S. Attorney Tracy Wilkison for the Central District of California said in a statement. "Profits should not dictate medical decisions, which is why it is illegal to pay for referrals that can cloud physicians' medical judgment."
The seven SNFs named in the lawsuit are Bay Point Healthcare Center, Gateway Care and Rehabilitation Center, Hayward Convalescent Hospital, Hilltop Care and Rehabilitation Center, Martinez Convalescent Hospital, Park Central Care and Rehabilitation Hospital and Yuba Skilled Nursing Center.