Harborside Healthcare to Pay U.S. $1.375 Million to Resolve Allegations of Kickbacks and Sham Durable Medical Services

October 16th, 2009 by Qui Tam

The United States Department of Justice announced that Harborside Healthcare and HHC Nutrition Services will pay the United States $1.375 million to resolve False Claims Act allegations that the company received kickback and assistance under the guise of sham durable medical equipment (DME) provider.   The government alleged that McKesson Corp., and its affiliate MediNet Corporation provided the kickbacks and assistance and, in return, Harborside purchased its DME products, such as non-enteral supplies, from McKesson.

Violations of the federal Anti-Kickback Statute, 42 U.S.C. Section 1320a-7b(b), have served as the basis for many whistleblower (or “Qui Tam”)  cases under the federal False Claims Act.  The Anti-Kickback Statute, and a number of similar State laws, generally prohibit anyone from offering, paying, soliciting or receiving any remuneration to induce (or reward) a referral of a person for services or items paid for by Medicare, Medicaid, another federal healthcare program.  These improper payments can come in many different forms, including, but not limited to: referral fees; finder’s fees; productivity bonuses; discounted leases; discounted equipment rentals; research grants; speaker’s fees; excessive compensation; and free or discounted travel or entertainment.

The Press Release from the Department of Justice can be viewed at http://www.usdoj.gov/opa/pr/2009/October/09-civ-1091.html

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