Local nursing homes to pay $6.9M to resolve kickback scandal

SAN DIEGO – The owner of four San Diego-area nursing homes has agreed to pay as much as $6.9 million to resolve civil allegations that their employees paid kickbacks for patient referrals and submitted fraudulent bills to government health-care programs, the U.S. Attorney’s Office announced Thursday.

The settlement resolves an investigation into allegations that workers at the care centers owned by Los Angeles-based Brius Management Co. paid kickbacks to patient-discharge coordinators at Scripps Mercy Hospital San Diego to induce referrals to the involved nursing homes, according to prosecutors.

The investigation into the accusations examined additional claims, made in a whistleblower lawsuit, that the nursing homes submitted false claims to Medicare and Medi-Cal for services provided to patients referred from Scripps Mercy Hospital.

The case involved Point Loma Convalescent Hospital, Brighton Place San Diego, Brighton Place Spring Valley and Amaya Springs Health Care Center in Spring Valley. The nursing homes entered into deferred-prosecution agreements with the U.S. Attorney’s Office in San Diego last year.

In the agreements, the four entities admitted that nursing home employees conspired to pay kickbacks without the knowledge of Brius officials, and conceded that their workers used corporate credit cards to pay for gift cards, massages, tickets to sporting events and an ocean cruise, all given to planners at Scripps Mercy Hospital to influence their referrals.

“Kickbacks for patient referrals are illegal under federal law because of the corrupting influence on our nation’s health care system,” said acting U.S. Attorney Sandra Brown.

“This settlement demonstrates our resolve to combat fraud that compromises the care provided to patients served by a government healthcare plan.”

The settlement calls for guaranteed payments of $1.78 million to the federal government, to be paid in three annual installments, and a $240,950 lump sum payment to the state of California. The nursing homes paid the first federal installment Nov. 6, and California received its payment four days later.

The hospitals also agreed to pay up to $4.9 million to the federal government if certain operational contingencies are met, making the total settlement worth up to $6,926,917.

The four nursing homes also have entered into corporate-integrity agreements with the Department of Health and Human Services.

The whistleblower in the case, Viki Bell-Manako, a former employee of one of the accused nursing homes, will receive 20 percent of each settlement payment, according to Brown’s office.