A California skilled nursing facility run by the state’s largest nursing home owner has, in conjunction with its management firm, agreed to pay $3.8 million to settle kickback allegations brought by a whistleblower.

Alta Vista Healthcare & Wellness Centre in Riverside, CA, and Rockport Healthcare Services faced False Claims Act charges of paying physicians to send them more patient referrals over an 11-year period, the Department of Justice announced late Wednesday.

The settlement amount was negotiated based on Alta Vista’s and Rockport’s “lack of ability to pay,” the government said. 

It alleged that from 2009 through 2019, Alta Vista, “under the direction and control of Rockport,” gave some physicians gifts including expensive dinners, golf trips, massages, tablets, and gift cards worth up to $1,000.

Alta Vista also paid the same physicians monthly stipends of $2,500 to $4,000, “purportedly” for their services as medical directors, a press release on the case said, noting that “at least one purpose of these gifts and payments was to induce these physicians to refer patients.”

Centers for Medicare & Medicaid Services records indicate Alta Vista has been at least partially owned by Shlomo Rechnitz since 2019. He has held operational or managerial control of the 99-bed facility since 2009.

Rechnitz or his wife Tamar are listed as owners of 118 nursing homes in a CMS database; it’s unclear if all of those are in California. A company that Rechnitz owns, Brius Healthcare, reportedly operates more than 80 nursing homes in the state, making it the largest provider there. 

He is a controversial owner, having been targeted in several lawsuits and state actions. A similar 2019 False Claims suit alleges Alta Vista, Rechnitz, Brius and Rockport paid cash kickbacks to employees who recruited skilled patients.

In the case resolved this week, the government said Alta Vista and Rockport’s actions resulted in false claims to Medicare and California’s Medicaid programs, the latter of which is jointly funded by the federal government and California. Under the settlement, they will pay $3,228,300 to the United States and $596,700 to California.

“Decisions that affect patient health should be made solely on the basis of a patient’s best interest,” said California Attorney General Rob Bonta. “When a healthcare company cheats and offers kickbacks to gain an unfair advantage, it jeopardizes the health and wellbeing of those who rely on its services. These illegal schemes also make public services and programs costlier, and ultimately waste valuable taxpayer dollars.”

The complaint being resolved began in 2015, when a former Alta Vista accounting employee brought her complaints in a qui tam suit on behalf of the government. That employee, Neyirys Orozco, will receive $581,094 as her share of the federal government’s recovery.

In addition to resolving their False Claims Act liability, Alta Vista and Rockport also entered into a five-year Corporate Integrity Agreement with the HHS-OIG which requires, among other compliance obligations, an Independent Review Organization’s review of Alta Vista’s and Rockport’s physician relationships.

McKnight’s calls to the administrator’s office at Alta Vista rang unanswered Thursday, while an operator did not pick up the main corporate number for Rockport and no voice message option was given.