California nursing facility settles physician kickback allegations for over $3.8M

Alta Vista Healthcare & Wellness Centre, LLC (Alta Vista), a skilled nursing facility located in Riverside, California, and its management company, Rockport Healthcare Services (Rockport), have agreed to pay a combined total of $3.825 million to the United States and California to settle allegations that the claims they submitted to Medicare and California Medicaid (“Medi-Cal”) were “tainted” by illegal kickbacks paid to physicians in exchange for patient referrals.

The Anti-Kickback Statute prohibits inducements or payments to physicians for referrals of patients for services paid for by Medicare, Medicaid, and other federally funded programs. This is meant to ensure that financial incentives do not compromise patient care, and that medical decisions are made with the best interest of the patient in mind. Medicare and/or Medicaid claims that grow out of such kickback arrangements are false for purposes of the federal False Claims Act.

Between 2009 and 2019, under the guidance of Rockport, Alta Vista provided certain physicians and their spouses with extravagant dinners, golf trips, limousine rides, massages, e-reader tablets, gift cards worth up to $1,000, and other lavish perks. Alta Vista also paid these physicians monthly stipends ranging from $2,500 to $4,000, allegedly for their services as medical directors. The gifts and payments were intended to encourage the physicians to refer patients to Alta Vista, which would then bill Medicare and/or California Medicaid for the care of those patients.

This settlement stems from a whistleblower complaint filed in 2015 by a former employee of Alta Vista under the qui tam provisions of the False Claims Act. These provisions allow private individuals to sue on behalf of the government and share in the recovery if the case is successful. Here, the whistleblower will receive $581,094 as her share of the federal government’s recovery.

The case is United States of America ex rel. Neyiris Orozco v. Shlomo Rechnitz et al., No. 15-cv-6177, filed in federal district court for the Central District of California. Jason T. Brown, head of the whistleblower law firm Brown, LLC, stated, “We applaud courageous whistleblowers who help ensure that fraud upon federal healthcare programs does not go unpunished.”