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Two Indian American Doctors and Village Home Care CEO Settle False Claims Act Allegations with $490,000 Payment

Dr. Vishnu Reddy and Dr. Kuchakulla Reddy have individually agreed to pay $105,000 each


OCALA, FL- Village Home Care LLC (VHC), a company located in Ocala, Florida, has agreed to pay $225,000 to settle allegations that it violated the False Claims Act (FCA). The company is accused of providing kickbacks to two physicians through sham medical director or sublease agreements in exchange for patient referrals. The CEO and majority owner of VHC, Joy Rodak, has also agreed to pay $105,000 separately. The settlements were determined based on the parties’ financial ability to pay.

Dr. Vishnu Reddy and Dr. Kuchakulla Reddy have reached separate agreements with the United States to pay $100,000 and $61,943.44, respectively, to resolve allegations that they accepted kickbacks from VHC in exchange for patient referrals.

The United States filed complaints in intervention in two whistleblower lawsuits brought under the FCA against VHC and Rodak. It is alleged that VHC knowingly billed Medicare for home health services for patients referred by Dr. Vishnu Reddy from November 15, 2012, to November 14, 2014, while paying him under sham medical director agreements. Dr. Vishnu Reddy did not provide any services, but VHC paid him $50,000 to induce patient referrals. Similarly, VHC allegedly billed Medicare for services referred by Dr. Kuchakulla Reddy from December 1, 2012, to March 5, 2014, while paying him through his medical practice under sham sublease agreements. VHC paid Dr. Kuchakulla Reddy $30,971.72 to encourage patient referrals, even though VHC did not utilize the space leased from him.

The settlements highlight the government’s commitment to protecting federal health care programs and taxpayer dollars by preventing the distortion of medical decision-making through illegal referral payments. Principal Deputy Assistant Attorney General Brian M. Boynton, who heads the Justice Department’s Civil Division, emphasized the importance of maintaining the integrity of these programs.

U.S. Attorney Roger Handberg for the Middle District of Florida stated that Medicare funds should be dedicated to providing care for seniors rather than incentivizing physicians through unlawful payments for patient referrals. The Office of the Inspector General of the Department of Health and Human Services, in coordination with the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Middle District of Florida, conducted the investigation leading to the resolutions.

The civil settlements encompass claims brought under the whistleblower provisions of the False Claims Act by former employees of VHC, including Kasey Jacobs, James Hanes, Katherine Brooks, Karen Swain, and Barbara Mellot-Yezman. The qui tam cases, titled 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.), enable private individuals to initiate legal actions on behalf of the United States and receive a portion of any recovery. The relators’ share of the settlements has yet to be determined.

It is important to note that the settlements do not constitute an admission of liability, as the claims resolved remain allegations. However, the resolution of this matter illustrates the government’s commitment to combating healthcare fraud using the False Claims Act as a powerful tool. Individuals can report potential fraud, waste, abuse, and mismanagement related to healthcare to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

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