A national senior living provider has agreed to pay $4.25 million to resolve False Claims Act kickback allegations involving a home health agency, but it has denied any wrongdoing or liability.
Watermark Retirement Communities, which manages 79 communities nationwide, agreed to the fine to resolve allegations that it had received a kickback from Moorestown, NJ-based Bayada, Bayada Home Health Care, Bayada Health and Bayada Home Care to facilitate referrals, according to a news release from the Justice Department.
The government alleged that Bayada, which settled its case in 2021 for $17 million, bought two of Watermark’s home health agencies in Arizona to feed referrals of Medicare beneficiaries living in Watermark residential communities. The scheme, according to the government, revolved around eight retirement communities across Arizona, Connecticut, Delaware, Florida and Pennsylvania, where the two companies had overlapping operations.
A Watermark spokeswoman told McKnight’s Senior Living that the company denies its actions were unlawful and that it cooperated fully with the DOJ in the investigation.
“We have entered into this settlement as the cost and distraction of litigation likely would have exceeded the amount required to resolve it through prevailing on the merits,” Watermark Director of Communications and PR Vicki Doyle said, adding that Watermark is proud of its commitment to integrity, business ethics and resident wellness. “While we know we acted ethically and in full compliance with the law, we made the difficult decision to settle to prevent an unsustainable drain on the resources and talent that are best directed toward supporting those who matter most to us — our residents, families and associates.”
The DOJ alleged that from Jan. 1, 2014, to Oct. 31, 2020, Watermark “caused the [home health agency] operator to submit false claims for payments to Medicare for services provided to Medicare beneficiaries as a result of the kickback transaction.”
The anti-kickback statute prohibits parties that participate in federal healthcare programs from “knowingly and willfully soliciting or receiving any remuneration in return for referring an individual to, or arranging for the furnishing of any item or services for which payment is made by, a federal healthcare program.”
“Whether you pay them or receive them, kickbacks undermine the integrity of our healthcare system,” US Attorney Philip R Sellinger said in the release. “Patients need to know the healthcare referrals they receive are in their best interest, not in the best interest of someone else’s bottom line.”
The settlement resolves claims brought under the whistleblower provisions of the False Claims Act by David Freedman, who was Bayada’s director of strategic growth from 2009 and 2016. Freedman will receive approximately $765,000 from the Watermark settlement after receiving $3 million plus attorneys’ fees from the Bayada settlement.
