Rancho Palos Verdes Doctor Agrees to Pay $530,000 to Settle Civil Lawsuit Alleging Home Health Kickback Scheme

June 15, 2012

LOS ANGELES – A Rancho Palos Verdes doctor has agreed to pay $530,000 to resolve allegations that he and his late wife, who managed his medical office, received cash payments and patient referrals in exchange for referring Medicare beneficiaries to GreatCare Home Health, Inc., a now defunct home health agency that was based in the Westlake District of Los Angeles.
Bo W. Paik has already paid the United States $30,000, and he has agreed to pay an installment of $400,000 by June 20. The balance is due within six months.
The settlement with Paik was announced today after all of the parties involved in the civil lawsuit signed a settlement agreement on Wednesday.
The settlement resolves allegations in a “whistleblower” lawsuit that Paik violated the federal False Claims Act, as well as the federal Anti-Kickback Statute, when he referred patients to GreatCare in exchange for cash payments. The Anti-Kickback Statute prohibits anyone from offering, paying, soliciting or receiving anything of value to generate referrals for items or services payable by any federal health care program. Paik also allegedly violated federal law when he submitted claims to Medicare for services he provided to patients referred to him by GreatCare.
The lawsuit alleged that over a three-year period GreatCare billed Medicare for thousands of home health visits that were not rendered, were medically unnecessary, or both. The lawsuit further alleged that GreatCare executed the scheme by recruiting Medicare beneficiaries and paying kickbacks to the beneficiaries and to doctors to induce referrals for home health services.
The scheme that was run out of GreatCare came to light in March 2010 when GreatCare’s then-receptionist, Misha Kim, filed a qui tam lawsuit under the federal False Claims Act. The lawsuit named as defendants GreatCare; the company’s owner and director, Hee Jung Mun; three physicians, including Paik, who allegedly referred patients to GreatCare; as well as a physical therapist and several licensed nurses and other unlicensed persons employed by Greatcare. United States District Judge Stephen V. Wilson unsealed the whistleblower lawsuit in October 2011, and Dr. Paik is the first defendant to settle the allegations made in the civil case.
Paik agreed to pay the settlement sum without admitting any wrongdoing.
Several other defendants in the civil lawsuit have been charged and have pleaded guilty to health care fraud and related charges in parallel criminal cases. For example, the owner of GreatCare pleaded guilty in January to health care fraud charges and is scheduled to be sentenced later this year (see: http://www.justice.gov/usao/cac/Pressroom/2012/008.html).
Paik is not currently charged criminally.
The civil case was investigated by the Federal Bureau of Investigation and the Office of Inspector General of the U.S. Department of Health & Human Services.

CONTACT: Assistant United States Attorney Lynn Healey Scaduto
Civil Fraud Section
(213) 894-7395

Release No. 12-079

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