U.S. Settles Lawsuit Alleging That Bronx Nursing Home Paid Kickbacks for Patient Referrals and Switched Resident’s Healthcare Coverage Without Their Consent

www.Justice.gov,  Press Release, May 17, 2023

Defendants, Including Former Nursing Home Administrator, Agree to Pay a Total of $3.46 Million
Damian Williams, the United States Attorney for the Southern District of New York, and Naomi Gruchacz, the Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), announced today that the United States has filed and settled a civil fraud lawsuit alleging that MORRIS PARK NURSING HOME (“MORRIS PARK”), a skilled nursing facility located in the Bronx, New York, engaged in two fraudulent and illegal schemes that violated the False Claims Act and the Anti-Kickback Statute.  The first scheme involved cash payments made to a supervisor at a nearby hospital for patient referrals, and the second scheme involved switching residents’ Medicare coverage without their consent in order to increase the Medicare payments MORRIS PARK received.  The United States’ complaint also names as defendants TZODIK WEINBERG, a/k/a “Justin Weinberg,” MORRIS PARK’s former Administrator, and MAIER ARM for their roles in the fraudulent conduct.    

Under the settlement agreements approved by U.S. District Judge Jennifer H. Rearden, the estate of the owner of MORRIS PARK at the time of the conduct alleged in the Complaint will pay to the United States $2.85 million, WEINBERG will pay $495,000, and ARM will pay $115,000.  Each defendant also made extensive factual admissions regarding their conduct.  The settlement with the estate took into consideration MORRIS PARK’s prior voluntary self-disclosure of facts related to the improper changes made to residents’ insurance coverage. 

HHS-OIG Special Agent in Charge Naomi Gruchacz said: “The misconduct that occurred at Morris Park exhibits the prioritization of profits over residents’ best interests.  This nursing home paid illegal kickbacks to manipulate the resident referral process and changed patients’ health coverage selections without properly obtaining their consent, with no apparent concern for how these events could negatively impact residents.  HHS-OIG and our fellow law enforcement agencies strive to ensure that entities furnishing services to Medicare enrollees are operating in accordance with federal health care laws.”

Medicare beneficiaries may enroll in Medicare Parts A and B, known as Original Medicare, or in Medicare Part C Advantage Plans (“MA Plans”), which are administered by private companies that contract with the government.  Under Original Medicare, the Centers for Medicare & Medicaid Services (“CMS”) directly reimburses healthcare providers, like skilled nursing facilities, on a fee-for-service basis.  In contrast, when reimbursing services provided under MA Plans, CMS pays Medicare Advantage Organizations (“MAOs”), which operate the MA Plans, a fixed, capitated amount each month for each Medicare beneficiary enrolled in the MA Plan.  CMS advises individuals to consider various factors in deciding between enrolling in an MA Plan or Original Medicare, such as differences in out-of-pocket costs and doctor choice. Continue Press Release