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Watermark Retirement Communities Agrees to $4.25 Million Settlement Over Alleged Medicare Kickbacks
The Arizona-based senior living operator settles with the U.S. government, marking the conclusion of a whistleblower case that has seen recoveries exceeding $21 million.
Watermark Retirement Communities LLC, which manages 79 retirement homes nationwide, has settled allegations that it violated the False Claims Act. The Tucson-based company will pay $4.25 million to resolve claims of receiving kickbacks from a nationwide home health agency operator for facilitating Medicare referrals.
The U.S. Attorney's Office for the District of New Jersey announced that Watermark Retirement Communities, based in Tucson, Arizona, has agreed to pay $4.25 million. This settlement is to resolve allegations that the company violated the False Claims Act by receiving kickbacks to facilitate Medicare referrals. The alleged scheme operated between January 1, 2014, and October 31, 2020.
The allegations center around eight Watermark retirement homes across five states: Arizona, Connecticut, Delaware, Florida, and Pennsylvania. These homes had overlapping operations with a nationwide home health agency (HHA) operator, which was accused of purchasing two of Watermark's HHAs in Arizona to induce Medicare beneficiary referrals.
Kickbacks undermine the integrity of the healthcare system, affecting both federal funding and patient trust. The Anti-kickback Statute prohibits any remuneration for referring individuals to services funded by federal health care programs.
U.S. Attorney Philip R. Sellinger stressed, "Patients need to know the health care referrals they receive are in their best interest, not in the best interest of someone else's bottom line."
The settlement also resolves claims initiated by a whistleblower, David Freedman, the former director of strategic growth for the HHA operator. Freedman will receive approximately $765,000 from the settlement. In September 2021, the HHA operator entered into a $17 million settlement over similar claims, bringing the total recoveries from this case to over $21 million.
Principal Deputy Assistant Attorney General Brian M. Boynton emphasized, "It is imperative that decisions about the care provided to federal health care beneficiaries are not undermined by the payment of kickbacks."
This resolution was a coordinated effort involving the U.S. Attorney’s Office for the District of New Jersey, the Justice Department's Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Department of Health and Human Services Office of Inspector General. Tips regarding potential healthcare fraud can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
While the claims resolved by this settlement remain allegations, the case underscores the government’s commitment to maintain the integrity of the federal health care system. Residents of Morris County who have loved ones in retirement communities should be aware of the critical importance of transparent and lawful operations within the healthcare industry.
