Brius homes involved in kickback scheme face heightened government oversight

As part of its $6.9 million settlement with the U.S. Department of Justice over allegations of Medicare and Medicaid fraud, Brius has signed “Corporate Integrity Agreements” (see below) that require enhanced federal oversight of its four San Diego area nursing homes during the next five years.

The agreements, obtained by BriusWatch, require the homes to provide annual reports to the US. Department of Health and Human Services’ Office of Inspector General documenting their compliance with federal anti-kickback laws.

The homes are required to appoint a compliance officer who will be in charge of “developing and implementing policies, procedures and practices designed to ensure compliance,” monitoring compliance, and making compliance reports to the nursing homes’ governing bodies.

The facilities also must hire an outside entity – such as an accounting, auditing, law for consulting firm – to serve as an “Independent Review Organization,” which will monitor the homes and prepare annual reports.

The facilities also must train employees about the anti-kickback statutes, establish a compliance committee that reports to federal regulators, and create an anonymous hotline where whistleblowers can disclose any “potential violation of criminal, civil or administrative law.”

The corporate integrity agreements, signed by Brius attorney Mark Johnson, are in place at Amaya Springs Health Care Center in Spring Valley, Brighton Place – San Diego, Brighton Place – Spring Valley, and Point Loma Convalescent Hospital.

Following an FBI corruption probe, Brius admitted that its employees at the four San Diego nursing homes used corporate credit cards to pay for gift cards, massages, tickets to sporting events, and a Hornblower cruise given to discharge planners at Scripps Mercy Hospital San Diego in order to induce patient referrals.

A Brius employee said she personally informed CEO Shlomo Rechnitz about the “pervasive” fraud during a meeting at his Los Angeles home in the spring of 2010, according to a federal lawsuit. Nonetheless, the kickback schemes continued. The following year, the employee alerted federal authorities.

Following a federal investigation, Brius — which controls one-in-14 California nursing home beds — agreed to pay up to $6.9 million to resolve allegations that it defrauded government healthcare programs through the kickback scheme.

“Kickbacks for patient referrals are illegal under federal law because of the corrupting influence on our nation’s healthcare system,” Acting U.S Attorney Sandra R. Brown said late last year when the settlement was announced.

Under the five-year Corporate Integrity Agreements, the homes must also create a centralized tracking system “monitoring the use of leased space, medical supplies, medical devices, equipment and other patient care items to ensure that such use is consistent with terms of the agreements.”

Federal investigators will also have full authority to interview officials at the nursing homes and review records to verify compliance.

The homes will be subject to $2,500 daily fines for failing to implement the compliance program or submit timely annual reports. Failing to grant access to federal investigators will carry a $1,500 fine and any compliance report that includes false information carries a $50,000 fine.

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