Morris Park Nursing Home Reaches $3.46 Million Settlement Over False Claims Act and Anti-Kickback Statute Violations

It was recently announced that Morris Park Nursing Home and its former Administrator, Tzodik Weinberg (aka Justin Weinberg), and Maier Arm, agreed to pay a total of $3.46 million for their part in illegal and fraudulent schemes that violated the False Claims Act and the Anti-Kickback Statute.

Background and Allegations

The complaint alleged that from January 1, 2017, through December 31, 2019, Morris Park offered and paid remuneration to a Jacobi Medical Center discharge planning supervisor to induce her to refer Original Medicare beneficiaries for admission to Morris Park. For most of the period, Morris Park allegedly paid the manager $150 for each referred patient who was admitted to the facility, and Weinberg personally delivered the cash payments to the manager, often meeting her in a CVS parking lot. He also personally reached out to the manager on a regular basis to request patient referrals when Morris Park had empty beds to fill. The Jacobi manager was paid between $5,000 and $10,000 for the referrals, in addition to tickets to Yankees games, invitations to holiday parties, and frequent food deliveries.

In addition to the kickbacks, the government alleged that from January 1, 2018, through December 31, 2019, Morris Park – at the direction of Weinberg – disenrolled residents from their self-selected Medicare Advantage plans and re-enrolled them in Original Medicare, without the consent of the resident or their authorized representative. According to the government, Morris Park employees would approach residents to persuade them to switch their insurance coverage, often in a vulnerable situation, such as at their bedside. During those conversations, the Morris Park employee would not always explain how changing to Original Medicare would impact the resident’s coverage, co-payments, and deductibles. In many cases, the staff member would switch the insurance coverage without getting the resident or their authorized representative to sign a consent form to request the insurance change. Additionally, Morris Park would occasionally offer to reduce or waive the co-payments that would be owed by residents under Original Medicare to persuade them to agree to disenroll from their Medicare Advantage plan – at the direction of Weinberg.

Additionally, in the summer of 2018, it was alleged that Morris Park retained Weinberg’s friend Maier Arm (at the direction of Weinberg) to assist with the disenrollments. Arm worked for another skilled nursing facility and received $1,000 per resident for disenrollment. Arm split the $1,000 fee with Weinberg, thereby allowing Weinberg to pocket $500 for every resident that was disenrolled.

Settlements

The estate of the owner of Morris Park at the time the alleged conduct occurred will pay $2.85 million while Weinberg will pay $495,000 and Arm will pay $115,000.

The settlement with the estate of the owner of Morris Park (Morris Berkowitz) included many admissions, including that Morris Park did make the alleged cash payments to the Jacobi manager alleged above, and that during the time frame, Morris Park admitted dozens of Medicare patients who were referred to the facility by Jacobi. The settlement also includes admissions that Morris Park staff often did not fully explain to residents and their families how changing to Original Medicare from Medicare Advantage would impact the resident’s coverage, co-payments, and deductibles, and that in most cases, Morris Park disenrolled the patients without obtaining consent from the resident or family member. Additionally, Morris Park paid Weinberg monthly cash bonuses if the average number of Original Medicare residents at the facility was at a certain level for a given month. Marketing and admissions staff members were also paid bonuses tied to the admission of new Original Medicare residents. Of the $2.85 million settlement, $1.650 million constitutes restitution.

As part of the Weinberg settlement, Weinberg admitted to multiple allegations, including that he delivered the cash payments to the Jacobi manager and that he sought to maximize the number of residents enrolled in Original Medicare. He also admitted to encouraging Morris Park staff to persuade residents and their family members to disenroll from Medicare Advantage and re-enroll in Original Medicare. He further admitted to the allegations involving Arm, including that he received $500 from each $1,000 payment that Arm received and that once Arm was “retained” by Morris Park, the pace of enrollments increased. Of the $495,000 settlement, $247,500 constitutes restitution.

Through Arm’s settlement, he acknowledged that Morris Park would benefit from changing residents’ insurance to Original Medicare and that he received $1,000 for each Morris Park resident that he helped to disenroll from a Medicare Advantage plan and enroll in Original Medicare. He further acknowledged that $500 of each of those referrals went to Weinberg. Additionally, he confirmed that while he usually relied on the actual Morris Park staff to obtain and document the resident’s consent to change plans, he did not ever confirm that the resident consented before processing the disenrollment paperwork. Of his $115,000 settlement, $57,500 constituted restitution.

U.S. Attorney Damian Williams said, “Morris Park and its former Administrator prioritized boosting Medicare payments above compliance with the law. They paid cash kickbacks to obtain patient referrals to fill empty beds and switched residents’ insurance coverage without properly obtaining the residents’ consent in order to increase the amount the facility was paid. This Office is committed to pursuing all violations of the Anti-Kickback Statute and other laws designed to ensure that medical decisions are based only on the patient’s best interest.”