Harborside Healthcare to pay $1.4 million settlement in kickback lawsuit

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Harborside Healthcare has agreed to pay $1.375 million to the United States to settle a lawsuit alleging that the company received kickbacks through a durable medical equipment scam, the Department of Justice announced Thursday.

According to government allegations, the Boston-based long-term care chain  violated the anti-kickback statute and the False Claims Act when it set up HHC Nutrition Services, a sham DME provider. Through HHC, Harborside purchased non-enteral supplies and other durable medical equipment from McKesson Corp. and MediNet Corp. in exchange for kickbacks. In addition to the almost $1.4 million settlement, Harborside has agreed to forgo $498,000 in DME Medicare claims it has yet to file. The DOJ is taking similar legal action against McKesson in the northern district of Mississippi. 

The suit was filed on behalf of the government by whistleblower Tommy Jamison, who will receive $275,000 from the settlement. The federal investigation in ongoing, authorities said. In 2007, Harborside was acquired by Sun Healthcare for $350 million.


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