Medicare Fraud Whistleblower Lawsuit Settled for $17 Million

Miami, FLA healthcare fraud lawsuit has been settled for $17 million, reportedly the largest settlement of a case involving skilled nursing facility kickbacks in the US. The lawsuit initially began as a whistleblower claim, and the settlement will see the whistleblower receive $4.25 million.

According to South Florida Business Journal (6/16/15), Plaza Health Network agreed to pay $17 million to settle allegations that physicians were paid as fake medical directors in return for patient referrals to the facilities. The whistleblower was former Plaza Health CFO Stephen Beaujon, who also claimed Plaza Health created fake records to falsely bill Medicare and Medicaid.

Plaza Health reportedly operates seven nursing centers in southern Florida. The company’s board was allegedly involved in carrying out the fraud, the lawsuit alleges. According to a report in Florida Bulldog (11/20/14), the lawsuit alleged the government was scammed out of $130 million and involved up to 55 physicians. Of those 55 physicians, 11 were paid $2 million over a three-year period.

The Department of Justice noted in its news release that the physicians were hired for ghost positions at Plaza Health facilities but did not have to record their hours worked or show up to perform duties.

“Illegal inducements paid to physicians in exchange for patient referrals will not be tolerated,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.

Beaujon also alleges he was demoted for raising concerns about the company’s illegal activities. The Anti-Kickback Statute prohibits any remuneration to induce referrals for programs covered by federal healthcare, including Medicare.

“Illegal kickbacks undermine the integrity of the Medicare system by putting profits in front of patient welfare,” said Special Agent in Charge George L. Piro of the FBI’s Miami Field Office.

In settling the lawsuit, Plaza Homes, also known as Hebrew Homes Health Network, did not admit liability. As part of the settlement, William Zubkoff, former president and executive director of the company, agreed to resign.

Beaujon’s lawsuit was filed under the qui tam provisions of the False Claims Act, which allows private individuals to file a lawsuit on the government's behalf and share in the recovery.

The lawsuit was United States ex rel. Beaujon v. Hebrew Homes Health Network, Inc., et al, Case No. 12-20951 CIV in the Southern District of Florida.