The Oklahoma City-based home health provider Carter Healthcare will pay $22.9 million in order to resolve allegations that it paid physicians to induce referrals of patients that led to false claims to the Medicare and TRICARE programs.

“The taxpayer dollars that fund Medicare and Medicaid are meant to support the delivery of health care services most suitable for beneficiaries,” Mike Stapleton, acting special agent in charge at the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) said in a press statement. “The payment of kickbacks to medical providers to induce referrals for home health services can improperly divert those dollars and undermine the quality of care being provided to patients.”

Carter Healthcare ran afoul of the Anti-Kickback Statute, which bans the “offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.”

“Offering illegal financial incentives to physicians in return for patient referrals undermines the integrity of our health care system,” U.S. Attorney Robert J. Troester said in the statement. “Patients deserve care based on good medicine and informed choice that is free from the corrupting influence of money and other motivating enticements. We are committed to pursuing entities and individuals that offer kickbacks and the doctors that solicit or accept them.”

Carter Healthcare’s payment settles the allegations that from 2013 to 2020 the company paid its home health medical directors in Oklahoma and Texas to induce referrals for patients. This resulted in the submission of claims for illegally referred patients, a violation of the False Claims Act.

The company’s former CEO Stanley Carter and COO Brad Carter have agreed to no longer participate in Medicare, Medicaid and all other federal health care programs for five years.

“Government-sponsored programs like Medicare and TRICARE are intended to support the health care needs of deserving Americans,” FBI Oklahoma City Special Agent in Charge Edward J. Gray said in the statement. “Today’s announcement demonstrates the FBI’s commitment to holding individuals and companies accountable for illegally profiting off of federally funded programs. We are determined to safeguard the integrity of our nation’s health care systems.”

In addition to the settlement, CHC Holdings – or Carter Healthcare – has entered into a five-year corporate integrity agreement with the HHS-OIG.

This means an independent review organization will review arrangements entered into by or on behalf of Carter Healthcare entities. It also requires compliance-related certifications from executives.

As part of the settlement, the defendants didn’t admit liability and the government did not dispute the legitimacy of the claims.