11 S Bay Docs, Med Staff Implicated In Patient-cash Scheme: DOJ

SARATOGA, CA — Federal complaints have been filed against 30 defendants accused of a patients-for-cash kickback scheme, the U.S. Attorney's Office announced Thursday. Eleven of these medical practitioners hail from the South Bay, the list reads.

The complaints, which were unsealed Thursday morning, describe a wide-ranging patients-for-kickback scheme that involved Amity Home Health Care and Advent Care, Inc. paying doctors, marketers and other medical professionals for referring patients for home health and hospice services. Amity is the largest home health care provider in the San Francisco Bay Area, while Advent Care, Inc. provides hospice care to the region.

Dr. Zheng Zhang, 62, of Saratoga, was named in the complaint. All the physician's appointments were canceled Thursday.

According to the complaints, all the defendants participated in the scheme paid kickbacks to marketers, doctors, and other medical professionals in exchange for the certification or referral of patients for home health or hospice services. Also charged are 28 people including doctors, nurses, marketers, a social worker, and additional employees of Amity.

According to the complaints, every defendant charged was recorded by law enforcement officers either offering, accepting, or approving illegal payments for patient referrals, U.S. Attorney David L Anderson contends. The DOJ worked alongside Federal Bureau of Investigation Special Agent in Charge John F. Bennett, and U.S. Department of Health and Human Services Agent Steven J. Ryan in the Office of the Inspector General to conduct the sting operation.

It's a crime for any person to knowingly solicit, offer or pay a kickback, bribe and rebate for furnishing services under a federal health care program. Because many of the patients were insured by Medicare, a taxpayer-funded insurance plan, the referral of patients through the kickback scheme violated the statute.

"The complaints allege a scheme for doctors, nurses, and other medical care professionals to trade patients for cash," Anderson said. "This is the largest cash-for-patients scheme ever charged criminally in the Northern District of California."

"The transition to a home health agency should be based on medical and personal needs – not cash payments or thinly-disguised referral bribes as alleged in these cases," Special Agent In Charge Ryan said. "We will continue working with law enforcement partners to guard these vital government health programs as patients and taxpayers deserve better."

The criminal complaints describe how Amity and some of its employees bribed individuals associated with hospitals, skilled nursing facilities and doctors’ offices to induce those practitioners to send patients to Amity and Advent.

Amity and the other defendants often disguised the kickbacks as payroll, phony medical directorships, and sometimes as "entertainment, reimbursements, gifts or donations." Further, several of the defendants are doctors and other health care professionals who allegedly received bribes in exchange for making referrals to Amity and Advent and other home health agencies, so that the companies could provide and bill for services, the federal case lays out.

In the case of Amity, Chief Executive Officer Amanda Singh and her employees are accused of compensating these professionals in cash for each patient referral and for making introductions to physicians, case managers or other health care professionals who could refer patients.

In addition, some of the defendants are described as marketers — meaning those who received cash and gifts including tickets to Warriors games in exchange for patient referrals, the DOJ added. Singh allegedly instructed marketers "to take clients out to elaborate meals, sporting events and purchase gifts for individuals willing to provide Amity with patients mainly Medicare patients." When patient referrals were slow, Singh appeared to step up the requests with additional gifts.

Each defendant is charged with illegally influencing patient referrals for federally funded health care through payments. In addition, Singh is charged with lying to investigators and tampering with witnesses.

If convicted, the defendants due to appear in U.S. District Court face a maximum sentence of 10 years in prison and a maximum $500,000 fine. The corporations are subject to a $1 million fine for each violation. Plus, Singh faces a maximum statutory penalties combined of 25 years and $500,000 in fines for separate charges.