Vicki House, president of Nurses Registry and Home Health Corp., has agreed to pay the federal government a little more than $1 million to settle allegations that she provided unlawful compensation to three doctors who referred patients to the company.
House agrees to pay a total of $1,082,416 under the settlement announced Tuesday by U.S. Attorney Kerry B. Harvey.
Lennie House, the CEO of Lexington-based Nurses Registry, died in February at age 72. Vicki House, his widow, has been president since his death.
David Guarnieri, Vicki House's attorney, said she agreed to "accept the government's terms before this case has any more of a personal or financial toll on her."
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"The stress of this litigation undoubtedly played a role in Lennie's unfortunate and unexpected death," Guarnieri said. "The financial toll that the ongoing litigation has had not only on Lennie and Vicki but on the company ... has been immense.
"While Vicki is steadfast that she has not violated the law in any way, shape or form, the time to resolve this case with the government is here and now," Guarnieri said.
The settlement says that from March 2006 through April 2010, House provided compensation to three physicians who referred patients to Nurses Registry, a company that provides home-health services to about 1,350 patients in Central Kentucky. The alleged compensation was sometimes non-monetary, such as tickets to concerts and University of Kentucky basketball games or other athletic events, or monetary or a combination.
Nurses Registry then submitted claims to Medicare seeking payment for services it provided to the patients referred by these physicians. The government contends that conduct violated the Stark Law, which prohibits the submission of claims resulting from referrals from physicians to whom the agency has provided compensation.
Those referrals led to $1,082,416 in Medicare payments to Nurses Registry.
Vicki House was not involved with home-health matters but "when others were not available to approve the release of tickets, that responsibility fell to Vicki," Guarnieri said.
Under the law, "there's a limit around $365 a year that doctors can receive from entities without creating a financial relationship," Guarnieri said. "Once they go over that limit, that can create a financial relationship."
The settlement agreement says it is neither an admission of liability by House nor a concession by the federal government "that its claims are not well founded."
The settlement only resolves the government's claims against Vicki House. It does not resolve other allegations of kickbacks or Medicare fraud against Nurses Registry or the estate of Lennie House. Those defendants are scheduled for trial in August in U.S. District Court in Lexington.
"We intend to use every tool available to protect the taxpayers from those who abuse federal health care programs for personal gain," Harvey said in a release. "Every dollar lost to fraud and abuse is a dollar that is unavailable to meet the needs of those who depend on Medicare for vital health care needs. We will continue to vigorously protect the interests of the United States in this litigation."
The settlement announced Tuesday comes after Nurses Registry filed for Chapter 11 bankruptcy protection on June 26.
Last week, a U.S. bankruptcy judge in Lexington ordered the federal government to transfer $500,000 in withheld Medicare payments to Nurses Registry so it could make its payroll.
Medicare payments to Nurses Registry were suspended in May because of alleged fraud and kickbacks. The $500,000 was not tainted by allegations of fraud but had been withheld by the government.
Guarnieri said the "marketing practices" that Nurses Registry engaged in "are no different than what competitors were doing. The law recognizes that you can give gratuities to doctors and hospitals that you have relationships with, and so long as you stay within the limits of the law, there's absolutely nothing wrong with the practice.
"It certainly is not any evidence of a quid pro quo," Guarnieri said. "These doctors were referring patients to Nurses Registry because of the kind of care they have provided to patients. ... No doctor has given Nurses Registry a referral because of a ticket to a basketball game."