Harborside Healthcare to Pay U.S. $1.375 Million to Resolve Allegations of Kickbacks and Sham Durable Medical Services

Harborside Healthcare to Pay U.S. $1.375 Million to Resolve Allegations of
Kickbacks and Sham Durable Medical Services

WASHINGTON, Oct. 8 /PRNewswire-USNewswire/ -- Harborside
Healthcare and HHC Nutrition Services will pay the United States $1.375
million to resolve False Claims Act allegations that the company received
kickbacks and assistance under the guise of a sham durable medical equipment
(DME) provider, the Justice Department announced today. The government alleged
that McKesson Corp., and its affiliate MediNet Corp. provided the kickbacks
and assistance and, in return, Harborside purchased its DME, such as
non-enteral supplies, from McKesson. As part of today's settlement,
Harborside also agreed to forego $498,000 in DME claims that had not yet been
billed to Medicare.

Today's settlement resolves allegations of the United States
that this conduct violated the Anti-Kickback Statute and the False Claims Act.
There is a related action pending against McKesson and MediNet in the
Northern District of Mississippi that remains ongoing. In addition, the
United States' investigation of similar conduct involving other DME providers
and nursing home chains is continuing.

"It is critical that Medicare providers base their DME
purchasing decisions on what is in the best interests of their patients,"
stated Tony West, Assistant Attorney General for the Civil Division. "The
Justice Department will work vigorously to ensure that these decisions about
patient care are not tainted by kickbacks."

The settlement was the result of an ongoing investigation by
the Justice Department's Civil Division, the Office of Inspector General at
the U.S. Department of Health and Human Services, and the U.S. Attorney's
Office for the Northern District of Mississippi.

"Our Medicare system depends upon fair competition by medical
service providers. We are always vigilant to thwart sham operators, like HHC
Nutrition Services," said Jim M. Greenlee, U.S. Attorney for the Northern
District of Mississippi.

This action was initiated by the filing of a qui tam or
whistleblower suit by Tommy Jamison. Under the False Claims Act, a private
individual may bring lawsuits on behalf of the United States and receive a
portion of the proceeds of any settlement. Mr. Jamison will receive $275,000
as his share of the government's recovery.

SOURCE U.S. Department of Justice

U.S. Department of Justice, +1-202-514-2007, TDD: +1-202-514-1888