Retirement community company pays $4.25 million to settle whistleblower’s kickback allegations

by Ben Vernia | September 5th, 2023

On August 31, the Department of Justice announced that Arizona-based Watermark Retirement Communities had agreed to pay $4.25 to settle allegations — originally brought by a whistleblower — that the company had solicited and received kickbacks from a home health agency for referrals to the company’s retirement homes. According to DOJ’s press release:

Watermark Retirement Communities LLC, a senior living community operator based in Tucson, Arizona, that manages 79 retirement homes across the country, agreed to pay $4.25 million to resolve allegations that it violated the False Claims Act by soliciting and receiving a kickback from a nationwide home health agency (HHA) operator in order to facilitate referrals from Watermark retirement homes.

The United States alleged that the HHA operator purchased two of Watermark’s HHAs in Arizona to induce referrals of Medicare beneficiaries living in Watermark residential communities. The scheme was designed around eight Watermark retirement homes in five states (Arizona, Connecticut, Delaware, Florida and Pennsylvania) where the two companies had overlapping operations.  The United States alleged that from Jan. 1, 2014 through Oct. 31, 2020, Watermark caused the HHA operator to submit false claims for payments to Medicare for services provided to Medicare beneficiaries referred as a result of the kickback transaction. The Antikickback Statute prohibits parties who participate in federal health care programs from knowingly and willfully soliciting or receiving any remuneration in return for referring an individual to, or arranging for the furnishing of any item or services for which payment is made by, a federal health care program.

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The government announced that the whistleblower — a former executive at the home health agency in question — will receive $765,000 (an 18% relator’s share).

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