$3.8m Whistleblower Settlement for California and Department of Justice with Skilled Nursing Company

The United States Department of Justice and the California Attorney General each sent print releases on June 21st, 2023, noting a large $3.8m settlement with skilled nursing facility Alta Vista Healthcare & Wellness in Riverside, California.  You can view the press releases here and here. 

Alta Vista Healthcare & Wellness Centre, LLC (Alta Vista), and management company Rockport Healthcare Services (Rockport), have agreed to the settlement to end litigation where they are alleged to have submitted false claims to Medicare and Medicaid (Medi-Cal in California) by paying physicians for referrals. These referral payments are alleged by the US and CA governments to be illegal kickbacks.   

A Decade of Alleged Illegal Kickbacks 

According to the United States press release: 

“From 2009 through 2019, Alta Vista, under the direction and control of Rockport, gave certain physicians extravagant gifts, including expensive dinners for the physicians and their spouses, golf trips, limousine rides, massages, e-reader tablets, and gift cards worth up to $1,000. 

The governments also allege that Alta Vista and Rockport paid physicians up to $4,000 per month to be medical directors of the facility. The case was originally filed in 2015 under seal in the United States District Court for the Middle District of Florida, before being transferred to the Central District of California with provisions for the False Claim Act and California False Claim Act. The allegations include violations of Anti-Kickback Statute 42 U.S.C. § 1320a-7b. 

Assistant Attorney General Brian M. Boynton said “Kickbacks can impair the independence of physician decision-making and waste taxpayer dollars”. 

The companies admitted no liability in the settlement. The U.S. Department of Justice press release noted that the settlement amount was in part based on the defendant’s ability to pay. 

Federal and California False Claim Acts 

Both the federal government and California maintain False Claim Acts. 

The federal False Claim Act includes acts of: Price-fixing, bid-rigging, incorrect pricing, fraud during government bidding, false statements of work to the government, false invoices, accounting fraud, missing or defective material supplied to the government, product substitution, bribery, and illegal kickbacks. 

The California False Claim Act mirrors much of the federal False Claim Act, but for defrauding the government of California.  One addition to the California version is failure to report an inadvertent benefit after discovering it. In other words, a failure to correct a false claim such as an improper invoice payment could trigger penalties even if the original submission was not done with intend to defraud. 

Both acts allow for whistleblower rewards for those that bring novel information to the government, that results in a settlement. A case brought under a False Claim Act is known as a qui tam action. 

Qui Tam Law Firm 

Schneider Wallace represents whistleblowers, whether the violation is against the federal government, state government, or a local government. Schedule a consult with our whistleblower law firm for a free and private legal consultation. 

To speak with a lawyer with years of experience handling both government whistleblower and contractor fraud cases, contact us at 1-800-689-0024 or