Kickback Settlement Costs Pennsylvania Hospital $13.1 Million

Case: The most expensive kickback settlement of 2018 to date features Post Acute Medical, LLC (PAM) in the starring role. The case which began as a whistleblower lawsuit, claims the Pennsylvania-based rehab hospital paid physicians and other providers to generate millions of dollars in referrals for medical services which it then falsely billed to Medicare and Texas and Louisiana Medicaid. For his part in initiating the case, the whistleblower will pocket a tidy $2,345,670 share of the recovery. Significance: The key to the case are the details of the scheme, which the feds contend began when PAM first acquired the facilities in 2006. The complaint cites two kinds of financially suspect arrangements to induce referrals: Bribes disguised as medical director and other administrative fees paid under physician-services contracts; and “Reciprocal referral arrangements” under which PAM promised to refer patients to unaffiliated home health agencies and other providers on the understanding that the provider would refer its other patients to PAM facilities.