Orlando Skilled Nursing Facility, Executives to Pay $1.5M to Resolve Federal Kickback Allegations

Editor’s Note: After the publication of this article, Clear Choice Health Care responded to the allegations in a separate statement provided to Skilled Nursing News, strongly denying the government’s version of events.

The operator of an Orlando skilled nursing facility, along with several executives and a third-party doctor, earlier this month agreed to pay $1.5 million to settle federal allegations of an illegal kickback scheme.

Federal prosecutors accused the Melbourne, Fla.-based Clear Choice Health Care, operator of the Conway Lakes Health & Rehabilitation facility, of paying doctor Kenneth Krumins to receive referrals of Medicare-eligible SNF patients. Those actions violate the federal Stark Law, which prohibits self-referrals by physicians, and the Anti-Kickback Statute, according to a Monday statement from the Department of Justice.


“Disguising intricate kickback arrangements through directorships and other misrepresented positions corrupts physician decision-making and undermines the public’s trust in the health care system,” Shimon R. Richmond, special agent in charge at the Department of Health and Human Services’ (HHS) Office of the Inspector General (OIG), said in a statement released this week. “Our agency will continue to investigate health care providers that seek to illegally boost profits at the expense of federal health care programs.”

U.S. Attorney Maria Chapa Lopez specifically targeted Clear Choice and Krumins under the False Claims Act, which the DOJ has increasingly used to combat Medicare and Medicaid fraud in the health care system.

Of the total settlement, $1 million will come from Conway Lakes, Clear Choice, and three employees of the operators: former administrator Matthew File, Clear Choice part-owner and president Jeffrey Cleveland, and part-owner and senior vice president Geoffrey Fraser. Krumins will pay the remaining $500,000, according to the DOJ.


“Our office will aggressively pursue health care providers who engage in kickback schemes,” Chapa Lopez said in a statement. “These schemes drive up costs and undermine patient care. The United States Attorney’s Office will continue to advocate for the integrity of federally subsidized health programs and for the proper care of our seniors and our veterans.”

The DOJ emphasized that the settlement only resolves the allegations, and doesn’t represent an admission of guilt by any of the parties involved; Krumins’s $500,000 payment will also close the book on a related kickback charge involving an affiliated home health agency.

Under the qui tam provisions of the False Claims Act, whistleblower Jonathan Montes de Oca — a former employee of Conway Lakes who brought the initial lawsuit against Clear Choice — will receive $267,000 of the total settlement money.

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