Traditions Health Agrees to $34 Million Medicare Settlement Following Self-Disclosure

Key Takeaways

• $34 Million False Claims Act Settlement: Traditions Health agreed to pay $34 million to resolve civil allegations related to improper Medicare billing and physician referral arrangements tied to its home health services.
• Medically Unnecessary Services at Issue: The government alleged that between 2021 and 2024, Traditions billed Medicare for home health services from its Oklahoma location that did not meet medical necessity requirements.
• Physician Referral Payments Scrutinized: The settlement also addresses payments made to physician-medical directors in Oklahoma and Texas between 2019 and 2024, raising concerns under the Anti-Kickback Statute and the Stark Law.
• Self-Disclosure Mitigated Exposure: Traditions voluntarily disclosed the conduct, cooperated with the investigation, removed individuals linked to the misconduct, and strengthened its compliance program, factors cited by the government in resolving the case.

Deep Dive

Traditions Health has agreed to pay $34 million to resolve civil allegations that it improperly billed Medicare for home health services and provided financial benefits to physicians in connection with patient referrals, federal authorities announced Thursday.

The settlement resolves allegations that, between 2021 and 2024, Traditions submitted Medicare claims from its McAlester, Oklahoma location for home health services that were not medically necessary. It also addresses claims that, from 2019 through 2024, the company paid remuneration to physician-medical directors in Oklahoma and Texas who referred Medicare beneficiaries to Traditions for home health care.

Federal prosecutors said the referral-related payments raised concerns under the Anti-Kickback Statute and the Physician Self-Referral Law, commonly known as the Stark Law. The Anti-Kickback Statute prohibits payments intended to induce referrals of business reimbursed by federal healthcare programs, while the Stark Law bars physicians from referring patients for certain services, including home health care, to entities with which they have a financial relationship unless an exception applies. Medicare is prohibited from paying claims that result from arrangements that violate either law.

Unlike many False Claims Act cases, the matter originated from a voluntary self-disclosure by Traditions. After conducting an internal investigation, the company disclosed the conduct to the government and provided detailed written submissions. Prosecutors said Traditions cooperated throughout the investigation and took remedial steps, including removing individuals identified as responsible for the misconduct, enhancing its compliance program, and providing additional training to employees.

“Home health care is critical to Medicare patients who are unable to leave their homes for treatment,” said Brenna E. Jenny, Deputy Assistant Attorney General for the Justice Department’s Civil Division. She said the settlement reflects how timely self-disclosure and cooperation can be taken into account when resolving violations of Medicare program rules.

U.S. Attorney Christopher J. Wilson said billing Medicare for unnecessary or inappropriate care will not be tolerated, while noting that Traditions’ disclosure helped mitigate losses to taxpayers.

“Preying on vulnerable patients for financial gain is unacceptable,” said Scott J. Lampert, Acting Deputy Inspector General for Investigations at the Department of Health and Human Services Office of Inspector General. He said the resolution reinforces the government’s focus on program integrity and patient protection.

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