Thursday, December 8, 2016

Hospice Care Provider Settles False Claims Lawsuit Involving Allegations that Hospice Paid Doctor for Referrals By Donating To Doctor's Charity

On December 2, 2016, Vitas Health Corporation Midwest and related entities agreed to pay $200,000 to resolve allegations that they violated the False Claims Act and the Anti-Kickback Statute by paying Dr. Farid Fata for patient referrals to its hospice care services.

In an earlier unrelated criminal matter, Dr. Fata pleaded guilty to health care fraud, conspiracy to pay and receive kickbacks and promotional money laundering, and was sentenced to a term of 45 years in prison. 

The allegations in the civil False Claims Act suit were brought to the government by a whistleblower, known as a relator, under the qui tam provisions of the False Claims Act. 

From November 2012 to January 2014, relator Rita Dubois worked at Vitas as the Director of Market Development in Southeastern Michigan. Ms. Dubois’s complaint alleged that from mid-2012 through early 2014, Vitas contributed $15,750 to the Swan For Life Cancer Foundation, which was a cancer charity that Fata established. 

In return, Fata referred 23 patients to Vitas for hospice care, the complaint alleges. The U.S. intervened in the lawsuit.  Ms. Dubois will receive $36,000 out of the $200,000 settlement for her role in filing the qui tam action.

This case was investigated jointly by the U.S. Attorney’s Office for the Eastern District of Michigan and the Department of Health and Human Services, Office of Inspector General.

Attorney Commentary: This is one of the cases where when payments are made to third parties they are deemed to be illegal referral fees. Given that Dr. Fata's criminal case seems extensive and resulted in a long sentence, this was probably a small part of the allegations in the doctor's case. The case against the hospice was not criminal, however, this qui tam case shows that payments to a doctor or his related entities must be viewed carefully and run by compliance counsel. 

The conflict of interest in donating to a doctor's charity create the appearance of payment for referrals. The payment of $200,000 is far less than the costs of trying the lawsuit and the risks of losing so it makes good business sense but it is far better to avoid such situations. 

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Phone: 213-233-2260


DISCLAIMER: Green & Associates' articles and blog postings are prepared as a service to the public and are not intended to grant rights or impose obligations. Nothing in this website should be construed as legal advice. Green & Associates' articles and blog postings may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations, and other interpretive materials for a full and accurate statement of their contents and contact their attorney for legal advice. The primary purpose of this website is not the commercial advertisement or promotion of a commercial product or service and this website is not an advertisement or solicitation. Anyone viewing this web site in a state where the web site fails to comply with all laws and ethical rules of that state, should disregard this web site.

The information provided on this website is for informational purposes only. It is not intended to create, and does not create, a lawyer-client relationship with Green & Associates, Attorneys at Law. Sending an e-mail to Tracy Green does not contractually obligate them to represent you as your lawyer, or create any type of client relationship. No attorney-client relationship will be formed absent a written engagement or retainer letter agreement signed by both Green & Associates and client and which specifies the scope of the engagement.

Please note that e-mail transmission is not secure unless it is encrypted. E-mail messages sent to Ms. Green should not include confidential or sensitive information.