Traditions Health LLC has consented to pay $34 million to settle claims that it submitted home health care claims to Medicare that were not medically necessary and improperly compensated doctors for patient referrals, as announced by the U.S. Department of Justice on Thursday.
This settlement addresses potential civil liability under the False Claims Act and comes after the company self-disclosed the issues to federal authorities.
The Justice Department reported that Traditions billed Medicare for home health services from its McAlester, Oklahoma, location between 2021 and 2024 that lacked medical necessity. Additionally, federal authorities claimed that from 2019 to 2024, the company compensated physician medical directors in Oklahoma and Texas who referred Medicare patients to Traditions, which may have breached federal anti-kickback and physician self-referral laws.
The Anti-Kickback Statute forbids payments aimed at encouraging referrals of patients covered by government health care programs, while the Physician Self-Referral Law, commonly referred to as the Stark Law, prohibits physicians from referring patients for specific services, including home health care, to entities with which they have a financial connection unless certain exceptions apply. Claims arising from violations of either statute are not eligible for reimbursement by federal health care programs.
Officials from the Justice Department stated that Traditions received credit in the settlement for its voluntary disclosure of the misconduct and its cooperation with the government’s investigation. The company undertook an internal review, provided comprehensive disclosures to federal authorities, and enacted corrective measures, which included dismissing individuals identified as responsible for the wrongdoing, enhancing its compliance program, and boosting employee training.
“Home health care is critical to Medicare patients who are unable to leave their homes for treatment,” Deputy Assistant Attorney General Brenna E. Jenny said in a statement. She added that providers can reduce potential penalties by promptly disclosing misconduct and taking corrective measures.
U.S. Attorney Christopher J. Wilson for the Eastern District of Oklahoma said the case demonstrates that “early mitigation goes a long way toward addressing fraud and mitigating the loss of taxpayer dollars.”
The settlement resolves allegations only, and no determination of liability has been made.
