Sacramento Man Pleads Guilty to Medicare Kickback Scheme Involving Hospices and Home Health Agencies

Home health agencies are routinely investigated for kickbacks and a recent case involves cash kickbacks by an insider who was discharging patients. What providers fail to remember is that if there is an illegal kickback, that the entire claim is treated as a false claim even if it was performed and was medically necessary. 

On February 6, 2020, Jai Vijay of Sacramento, pleaded guilty to conspiring with the owners of home health care agencies and a hospice agency to pay and receive illegal kickbacks in exchange for Medicare beneficiary referrals.

According to court documents, Jai Vijay’s wife, Anita Vijay, worked as the social services director at a skilled nursing and assisted living facility in Sacramento. In her role, Anita Vijay assisted Medicare beneficiaries in selecting home health care and hospice agencies following their discharge from the facility. 

Anita Vijay used her position to steer Medicare beneficiaries to home health agencies in Folsom and El Dorado Hills and a hospice agency in Folsom. In exchange for the beneficiary referrals, the agencies’ owners paid Jai Vijay and Anita Vijay illegal cash kickbacks.

Four Indicted in California for Billing Compound Cream Prescriptions to TRICARE and Labor Union Health Plans

The government has been investigating pharmacies that dispense and bill compound creams for the past 5 years as well as the marketing companies that work with them. Much of the focus has been on billings to workers' compensation carriers or billing to TRICARE, military health insurance, and billing to union health plans.

On February 4, 2020, a 48-count grand jury indictment was unsealed naming four  defendants relating to an Orange County compound pharmacy, Professional Compounding Pharmacy (PCP), that allegedly submitted fraudulent bills to the military’s TRICARE health plan and a labor union health plan for medically unnecessary compound cream prescriptions in which there was alleged illegal marketing. An indictment is not evidence and all defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt. 

The indictment – which contains charges of health care fraud, mail fraud, illegal kickbacks and money laundering – alleges that PCP, its marketers and a physician fraudulently generated prescriptions for custom-made compound cream medications. The indictment alleges that some bills charged as $15,000 per tube.

The indictment alleges that two “pain clinics” in Lawndale and National City recruited beneficiaries of TRICARE and the International Longshore and Warehouse Union’s (ILWU) Pacific Maritime Association Welfare Plan. 

California Doctor Who Bought Pacific Hospital in Long Beach Sentenced to 15 Months in Prison for Allowing Continuance of Kickback Arrangements

On January 17, 2020, Dr. Faustino Bernadett, a physician who is also the former owner of Pacific Hospital in Long Beach hospital was sentenced to 15 months in federal prison for "misprision of a felony." That is a fancy word for saying that he knew of an illegal act and did not stop it.

Dr. Bernadett's case arose out of him continuing the kickback arrangements in existence when he bought Pacific Hospital. He was ordered him to pay a $60,000 fine on top of $1 million he has already forfeited to the United States.

Dr. Bernadett, a board-certified anesthesiologist and pain management physician who retired his license last year, pleaded guilty last year to a one-count criminal information charging him with misprision of a felony.

In 2005, Dr. Bernadett purchased Pacific Hospital from Michael D. Drobot. Under the terms of the sale, Mr. Drobot guaranteed to Dr. Bernadett that 75 spinal surgeries per month would be performed at Pacific Hospital or else Mr. Drobot’s payout would be reduced by $25,000 for each surgery below that requirement.

Former California Physician Sentenced to 2 Years in Federal Prison for Defrauding Medicare by Prescribing Unnecessary Home Health Services for Kickbacks and Illegally Prescribing Opioid Drugs

Physicians who order home health where it is not medically necessary can be charged with Medicare fraud. If that same physician orders medications, especially controlled substances, without seeing the patient on a regular basis, that can be another ground for a fraud charge. 

The loss amounts can be huge since the physician will be held responsible for the total amount of billings by the home health agency and the pharmacy's prescriptions. A recent case illustrates a physician who ordered home health in exchange for payments and then also prescribed some pain medications that were medically unnecessary.  

On January 6, 2020, Kain Kumar, a former doctor, was sentenced to 24 months in federal prison after having pleaded guilty in April 2019 to one count of health care fraud and one count of distribution of hydrocodone. Mr. Kumar practiced internal medicine, maintained medical offices in Palmdale, Rosamond, and Ridgecrest, California and surrendered his medical license last year.

He was sentenced by U.S. District Judge Philip S. Gutierrez. Mr. Kumar was also ordered to pay financial penalties totaling more than $1 million, consisting of $509,365 in restitution, $494,900 in asset forfeiture, and a $72,000 fine.