Donation to Charity in Exchange for Patient Referrals Violates Federal Law

December 5, 2016

On Friday, December 2nd, the U.S. Attorney’s Office of the Eastern District of Michigan announced that Vitas Health Corporation Midwest and related entities agreed to pay $200,000 to resolve allegations that they violated the False Claims Act and the Anti-Kickback Statute by paying Dr. Farid Fata for patient referrals to its hospice care services, announced U.S. Attorney Barbara L. McQuade. In an earlier unrelated criminal matter, Fata pleaded guilty to health care fraud, conspiracy to pay and receive kickbacks and promotional money laundering, and was sentenced to a term of 45 years in prison.

The allegations in the civil False Claims Act suit were brought to the government by a whistleblower, known as a relator, under the qui tam provisions of the False Claims Act. From November 2012 to January 2014, relator Rita Dubois worked at Vitas as the Director of Market Development in Southeastern Michigan. Dubois’s complaint alleged that from mid-2012 through early 2014, Vitas contributed $15,750 to the Swan For Life Cancer Foundation, which was a cancer charity that Fata established. In return, Fata referred 23 patients to Vitas for hospice care, the complaint alleges. Dubois will receive $36,000 out of the $200,000 settlement for her role in filing the qui tam action.

Patients deserve to receive referrals based on the quality of the services provided, not based on illegal kickback arrangements between medical providers,” McQuade said. “We are working to root out practices that enrich doctors and medical businesses at the expense and potential safety of patients.”

This case was investigated jointly by the U.S. Attorney’s Office for the Eastern District of Michigan and the Department of Health and Human Services, Office of Inspector General.

Jeffrey Lynne

About Jeffrey Lynne

Jeffrey C. Lynne is a South Florida native, representing individuals and business entities relating to licensing, accreditation, regulatory compliance, business structure, marketing, real estate, zoning and litigation pertaining to substance abuse treatment facilities and sober living residences. Mr. Lynne has been recognized across the region as a leader in progressive public dialogue about the role that substance abuse treatment has within our communities and the fundamental need and right to provide safe and affordable housing for those who are both in treatment for addiction and alcoholism as well as those who are established in their recovery.