Doctor’s Choice Home Care Inc. and two former executives have agreed to pay $5.15 million to resolve allegations that the home health agency provided “improper financial inducements” to referring physicians through “sham medical director agreements,” the U.S. Department of Justice (DOJ) announced earlier this month.

DOJ had also alleged that the agency offered bonuses to physicians’ spouses, who were Doctor’s Choice employees

Timothy Beach and Stuart Christensen founded Doctor’s Choice and formerly served as its top executives. The Sarasota-based home health agency has branches throughout the state of Florida.

Under terms of the settlement, Doctor’s Choice will pay nearly $3.9 million, with Beach and Christensen each paying $647,000. The claims resolved by the settlement are allegations only, as there has been no determination of liability, according to DOJ.

“The Department of Justice will continue to hold companies and individuals accountable for the payment of illegal remuneration in any form,” Acting Assistant Attorney General Jeffrey Bossert Clark of DOJ’s civil division said in a statement. “Improper inducements have no place in our federal health care system, which relies on health care providers making decisions based on the health care needs of their patients and rather than their personal financial interests.”

Doctor’s Choice will reportedly pay an additional $675,000 to resolve separate allegations that employees pressured clinical personnel to increase the number of home visits for Medicare patients to avoid being hit with a Low Utilization Payment Adjustment (LUPA).

“Operating an illegal referral scheme and providing medically unnecessary services places patients at risk and jeopardizes millions of taxpayer dollars,” Special Agent in Charge of the FBI Tampa Division Michael McPherson said.

The allegations resolved in the settlement were originally brought in two lawsuits filed under whistleblower provisions of the False Claims Act by former Doctor’s Choice employees.

For their involvement in the case and subsequent financial settlement, the employees will jointly receive a share of about $145,000, specifically from the government’s recovery of the LUPA allegations.

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