Largest ever fraud settlement reached by SNF: $17M

A Florida skilled nursing facility chain has reached a $17 million Medicare fraud settlement with the federal government, the largest amount ever paid, according to the U.S. Department of Justice.

Miami-based Plaza Health Network, formerly known as Hebrew Homes Health Network, was alleged to have violated the Anti-Kickback Statute when it paid physicians to pose as medical directors in exchange for Medicare patient referrals to its facilities.

Former Plaza Health CFO Stephen Beaujon filed a whistleblower lawsuit in 2012, which also alleged the company created false records to cover up almost $130 million in improper Medicare and Medicaid payments between 2008 and 2011.

The federal government joined the lawsuit, which also claimed other Plaza Health executives and the board of directors knew of the fraud. Executive director William Zubkoff, who left Plaza Health in March, ran the scheme from 2006 to 2013, according to prosecutors, and left as part of the settlement.

Beaujon will receive $4.25 million of the settlement.

As part of the agreement, Plaza Health has also entered a five-year integrity agreement with Health and Human Services and the Office of Inspector General, and will change its policies for hiring a medical director.

“Illegal inducements paid to physicians in exchange for patient referrals will not be tolerated,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer in a release from the Department of Justice.  “Medicare funds should be used to provide care for our senior citizens, not as an inducement to physicians to refer business.”