Village Home Care, CEO, and Two Doctors Pay $490,000 to Resolve False Claims Act Allegations for Paying and Receiving Kickbacks

Village Home Care LLC (VHC), located in Ocala, Florida, has agreed to pay $225,000 to resolve allegations that it violated the False Claims Act (FCA) by paying kickbacks to two physicians in the form of sham medical director or sublease agreements in exchange for patient referrals. Joy Rodak (Rodak), VHC’s CEO and majority owner, has agreed separately to pay $105,000. Both settlements are based on financial ability to pay. In addition, the United States has reached agreements with Dr. Vishnu Reddy and Dr. Kuchakulla Reddy to pay $100,000 and $61,943.44, respectively, to resolve allegations that each accepted kickbacks from VHC in exchange for patient referrals.

On Jan. 15, 2021, the United States filed complaints in intervention in two whistleblower lawsuits brought under the FCA against VHC and Rodak alleging that they knowingly billed Medicare for home health services for patients referred to VHC by Dr. Vishnu Reddy from Nov. 15, 2012, through Nov. 14, 2014, while paying Dr. V. Reddy under sham medical director agreements. Although Dr. V. Reddy performed no services, VHC paid him $50,000 to induce him to refer patients to VHC. The United States further alleged that VHC and Rodak knowingly billed Medicare for home health services for patients referred to VHC by Dr. Kuchakulla Reddy from Dec. 1, 2012, through March 5, 2014, while paying Dr. K. Reddy, through his medical practice, under sham sublease agreements. Although VHC did not use the space, VHC paid Dr. K. Reddy $30,971.72 to induce him to refer patients to VHC. 

“Paying doctors to refer patients for services paid for by federal health care programs can distort medical decision-making and result in medically unnecessary care,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The settlements in this matter demonstrate our commitment to protecting the integrity of these programs and the taxpayer dollars that support them.”

“Medicare funds should be used to provide care for our seniors, not to induce physicians to refer business,” said U.S. Attorney Roger Handberg for the Middle District of Florida. “This office will take action against individuals who make unlawful payment to physicians in exchange for patient referrals.”

The civil settlements include the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Kasey Jacobs, James Hanes, Katherine Brooks, Karen Swain, and Barbara Mellot-Yezman, all former employees of VHC. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam cases are captioned U.S. ex rel. Jacobs, et al. v. Village Home Care, LLC, et al., No. 5:21-cv-00073-CEM-PRL (M.D. Fla.), and U.S. ex rel. Brooks, et al. v. Village Home Care, LLC, et al., No. 5:21-cv-00072-CEM-PRL (M.D. Fla.). The relators’ share of the settlements has not yet been determined.

The resolutions obtained in this matter were the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the Middle District of Florida, and the Department of Health and Human Services Office of the Inspector General.

The matter was investigated by Senior Trial Counsel Sarah Arni and Trial Attorney Breanna Peterson of the Civil Division's Fraud Section and Assistant U.S. Attorney Sean Keefe for the Middle District of Florida.

The investigation and resolutions in this matter illustrate the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

The claims resolved by the settlements are allegations only and there has been no determination of liability.