Editor’s note: This story has been updated to include a comment from Conway Lakes.
A Florida nursing home and its affiliates must pay $1.5 million to resolve allegations of using a “sham medical director” to defraud the government, officials announced Monday.
The Department of Justice accuses Orlando-based Conway Lakes Health & Rehabilitation Center of arranging to pay an orthopedic surgeon to illegally refer Medicare patients for post-surgery services at the SNF. That doc, Kenneth Krumins, also allegedly took part in a similar scheme with a related home health agency, the DOJ said.
Officials at the nursing home then disguised those payments to Krumins by giving him a “sham” title as medical director of the facility.
“Disguising intricate kickback arrangements through directorships and other misrepresented positions corrupts physician decision making and undermines the public’s trust in the healthcare system,” Shimon Richmond, a special agent with the U.S. Department of Health and Human Services’ Office of Inspector General, said in a statement.
Officials said the arrangements violated physician-referral rules, commonly called the Stark Law, and anti-kickback statutes. Krumins has agreed to pay $500,000 to settle the allegations, while Conway Lakes, its administrator, management company and others must pay another $1 million. Claims were brought forward by a former employee and whistleblower, who will share in $267,000 of the proceeds.
The DOJ emphasized that the claims settled are allegations only, and Conway Lakes has not admitted any wrongdoing in the matter. In a statement issued to McKnight’slate Wednesday, the provider strongly denied the allegations and emphasized that it takes compliance with all federal and state regulations “very seriously.” The company chose to settle after determining that it would be “less disruptive to its business and its patients.”
“Conway Lakes has an extensive compliance program, which includes an anonymous hotline for patients, family members and employees to report any concerns,” said Geoff Fraser, senior VP and partner with Clear Choice Health Care. “The whistleblower, Mr. Montes de Oca, a former employee who was dismissed for failing to show up to work, never reported any of his concerns, nor did he inform a supervisor of any of the claims. In addition, Mr. Montes de Oca lodged accusations against multiple individuals without any evidence.”
To read the full statement, click here.
