The United States has filed a complaint under the False Claims Act against a Vacaville company alleging one of its owners and seven skilled nursing facilities systematically paid money to referring physicians to induce those physicians to make patient referrals, in knowing and willful violation of the federal Anti-Kickback Statute.

The complaint in intervention, which was filed in United States District Court in Los Angeles late Monday, names as defendants Paksn Inc.; Prema Thekkek, one of its owners; and seven skilled nursing facilities owned by Thekkek and/or operated by Paksn.

The United States alleges that the defendants entered into medical directorship agreements with certain physicians that purported to provide compensation for administrative services, but in reality, were vehicles for the payment of kickbacks to induce the physicians to refer patients to the seven facilities.

The Anti-Kickback Statute prohibits offering or paying anything of value to encourage the referral of items or services covered by federal health care programs.

Those seven facilities are four facilities in Hayward – Bay Point Healthcare Center, Gateway Care & Rehabilitation Center, Hayward Convalescent Hospital, and Hilltop Care & Rehabilitation Center – as well as Martinez Convalescent Hospital, Park Central Care & Rehabilitation Hospital in Fremont, and Yuba Skilled Nursing Center.

The United States specifically alleges that the defendants hired certain physicians who promised in advance to refer a large number of patients to the nursing facilities, paid physicians in proportion to the number of expected referrals, and terminated physicians who did not refer enough patients.

On one occasion, a Paksn employee told Thekkek that two physicians were being hired because “they are promising at least 10 patients for $2000 per month.” On another, Thekkek complained that if Paksn’s employees did not pay medical directors promptly every month, “[t]hese doctors will not give us patients.” On a third occasion, a Paksn employee told Thekkek that because “lately there are no real referrals” from one of the medical directors, “i am planning to say goodbye to him.”

This case was initially filed in December 2015 by Trilochan Singh, who was previously employed as Paksn’s vice president of operations and chief operating officer, under the whistleblower provisions of the False Claims Act. Those provisions authorize private parties to sue on behalf of the United States for false claims and share in any recovery. The Act permits the United States to intervene and take over the lawsuit, as it has done here in part. Those who violate the Act are subject to treble damages and applicable penalties.

The case is captioned United States of America ex rel. Trilochan Singh v. Paksn, Inc., et al., CV15-9064.