Nursing Facilities Accused Of Paying Kickbacks Settle For $45.6M: DOJ

BAY AREA, CA — A group of skilled nursing facilities in the Bay Area will enter a $45.6 million consent judgment to settle allegations that the facilities paid kickbacks to doctors in exchange for patient referrals, according to authorities.

Prema Thekkek and her company, Paksn Inc., owned or operated six facilities alleged to have submitted or caused the submission of false claims to Medicare by paying kickbacks that incentivized doctors to refer patients, authorities said.

“The administrators and beneficiaries of the Medicare Program expect that providers will make decisions based on sound medical judgment, not their personal self-interest,” U.S. Attorney Martin Estrada, of the Central District of California, said in a news release from the U.S. Department of Justice.

The settling facilities include Bay Point Healthcare Center, Gateway Care & Rehabilitation Center, Hayward Convalescent Hospital, and Hilltop Care & Rehabilitation Center — all in Hayward — as well as Park Central Care & Rehabilitation Center in Fremont and Yuba Skilled Nursing Center, according to the department.

The facilities from 2009 to 2021 entered agreements with physicians that were purportedly for administrative services but were actually vehicles for kickback payments, authorities said. They specifically hired doctors who promised in advance to refer a large number of patients, paid the physicians in proportion to their expected referrals and terminated those who did not refer enough patients, according to the department.

“They are promising at least 10 patients for $2,000 per month,” a Paksn employee told Thekkek, authorities said, to which Thekkek responded, “Good job. Make sure they give you patients everyday. [We] can also expand to other buildings with them, if possible.”

Under the settlement, announced Wednesday, the defendants will enter the $45.6 million consent judgment and make scheduled payments to the federal government of at least $385,000 over the next five years, based on the defendants’ inability to pay, authorities said. The defendants also entered a five-year corporate integrity agreement that requires an independent organization’s review of their physician relationships, according to the department.

The settlement is the result of a whistleblower complaint filed in 2015 by a former vice president at Paksn, authorities said.