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On January 1, 2017, the KHI News Service became part of KCUR public radio’s new initiative, the Kansas News Service. The Kansas News Service will continue to cover health policy news and broaden its scope to include education and politics. All stories produced by the former KHI News Service are archived here. Stories and photos may be republished at no cost with proper attribution and a link back to KHI.org.

KCK home health care agency to pay $1.8M to settle kickback allegations

By Dan Margolies, HEARTLAND HEALTH MONITOR | October 25, 2016

A Kansas City, Kansas, home health care agency and its owner will pay $1.8 million to settle allegations that it paid kickbacks in return for referrals of Medicaid patients to the agency.

Best Choice Home Health Care Agency Inc. and its owner, Reginald B. King, will pay the federal government just more than $1 million and the state of Kansas $788,220 to resolve the case, according to court documents unsealed Monday.

The case was filed under the False Claims Act by the recipient of the kickbacks, Christopher Thomas of Parkville, Missouri. The act allows citizens to sue on behalf of the government and collect a portion of any recovery if the government decides to intervene, which it did in this case.

Although Thomas was the recipient of the illegal kickbacks, he’ll collect $43,178, according to a news release from the Justice Department. That represents 10 percent of the federal share of the settlement, minus the kickbacks he received.

Typically, whistleblowers are entitled to anywhere from 15 percent to 30 percent of the total recovery in a case. But that share is reduced if the whistleblower took part in the fraud.

Thomas’ attorney could not be reached for comment. A call to King at Best Choice’s office was not returned.

Thomas filed his lawsuit under the False Claims Act in May 2013. However, because the act requires that such cases be filed under seal unless and until the government intervenes, it was not made public until Monday.

According to the court documents, here’s how the scheme unfolded:

Best Choice, which was located at 6625 State Ave. until June 2012 and then at 1232 N. 79th St., offered home health care services to Medicaid patients with head injuries. Thomas worked there as an office assistant before setting up his own business, Vision Group Transport Service. The business transported patients from their home to health care facilities.

Around July 2010, King offered to pay Thomas to refer clients to Best Choice. Thomas, who also briefly worked as a case manager at Best Choice while operating Vision Group Transport, accepted.

From about July 2010 to Jan. 25, 2013, Thomas referred more than 100 clients to Best Choice. In return, King paid Thomas and Vision Group $58,000.

Besides paying Thomas, King paid a former employee for referrals. And according to Thomas, other employees of Best Choice, including relatives of King, falsified the number of hours they worked for clients.

One employee was working at a QuikTrip when he claimed to have performed work as a transitional living specialist (TLS). Another worked full time for Time Warner Cable while reporting up to 80 hours per week of TLS services. Yet another claimed to have performed TLS services for a client who was incarcerated or homeless at the time.

Documents on file with the Kansas Secretary of State’s Office show that King, a resident of Shawnee, incorporated Best Choice in 2001. 

The Justice Department news release said the claims resolved by the settlement “are allegations only and there has been no determination of liability.”

A spokesperson for the Justice Department could not be reached for comment. 

— Dan Margolies, editor of the Heartland Health Monitor team, is based at KCUR.