Home health agency, executives to pay over $5M to settle fraud allegations

SARASOTA — Doctor’s Choice Home Care Inc. and its former executives, Timothy Beach and Stuart Christensen, have agreed to pay $5.15 million to resolve allegations that the home health agency provided improper financial inducements to referring physicians through sham medical director agreements and bonuses to physicians’ spouses who were Doctor’s Choice employees.

Sarasota-based Doctor’s Choice has branches throughout the state. Beach and Christensen founded Doctor’s Choice and formerly served as its top executives. 

According to a press release from the Department of Justice, Doctor’s Choice will pay $3,856,000 to settle the allegations. Beach and Christensen will each pay $647,000, the release adds. Doctor’s Choice will pay an additional $675,000 to resolve separate allegations that employees pressured clinical personnel to increase the number of home visits for Medicare patients to avoid the Medicare Low Utilization Payment Adjustment that would have decreased the reimbursement Doctor’s Choice received from Medicare in the absence of these unnecessary services, the release says. 

The settlement resolves allegations that Doctor’s Choice, Beach and Christensen violated the Anti-Kickback Statute and the Stark Law by entering into sham medical director agreements with physicians as a means of providing remuneration for referrals and also violated the Stark Law by providing bonuses to employees based on referrals to Doctor’s Choice by the employees’ physician spouses, according to the press release. 

The Anti-Kickback Statute prohibits the offering or payment of remuneration to induce or reward referrals for services paid for by federal health care programs. The Stark Law forbids certain medical providers, including home health agencies, from submitting claims to Medicare for services provided to patients who were referred by a physician with whom the provider has a prohibited financial relationship, unless that relationship falls within an applicable exception.

The agreement also resolves allegations Doctor’s Choice provided unnecessary services to Medicare patients to increase the number of skilled service visits provided during a home health episode to avoid the Low Utilization Payment Adjustment, which otherwise would have decreased Doctor’s Choice Medicare reimbursement.  

“The Department of Justice will continue to hold companies and individuals accountable for the payment of illegal remuneration in any form,” says Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division in the statement. “Improper inducements have no place in our federal healthcare system, which relies on healthcare providers making decisions based on the healthcare needs of their patients rather than their personal financial interests.” 

The allegations resolved in the settlement were originally brought in two lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act. One case was filed by Corina Herbold, and the second case was filed by Sara Billings, Misty Sykes and Marina Eschoyez-Quiroga, all of whom are former employees of Doctor’s Choice. 

The Act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. Billings, Sykes and Eschoyez-Quiroga will jointly receive a share of approximately $145,000 arising from the government’s recovery for the Low Utilization Payment Adjustment allegations, the release states. Herbold’s share has not yet been determined.

The settlement was the result of a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Middle District of Florida, the Office of Inspector General of the Department of Health and Human Services and the FBI. The case was handled by Assistant U.S. Attorney Charles Harden in the Middle District of Florida.

Sarasota-based Doctor’s Choice Home Care Inc. provides hospital-to-home transitions, recovery and the management of chronic illnesses. Doctor’s Choice, founded in 2007, has been expanding throughout Florida, making several acquisitions from spring 2019 to spring 2020.