Creative Hospice Care Inc. CEO Mahlega Abdsharafat has agreed to pay $9.2 million to settle allegations that the company and its affiliates were involved in fraudulent activities.

The settlement was released by the U.S. Department of Justice (DOJ) on Wednesday resolved three lawsuits brought against the Georgia-based company and its affiliates, collectively dubbed the Creative Hospice entities. The lawsuits were brought under the qui tam, or whistleblower, provisions for alleged violations of the anti-kickback statute and the False Claims Act (FCA).

Abdsharafat, known as Mallie Sharafat, is accused of entering kickback schemes with medical directors in exchange for hospice referrals. The hospice allegedly paid monthly stipends and a signing bonus to medical directors, with compensation increasing based on rising referral volumes.

“Decisions regarding end-of-life care are incredibly difficult and personal, and families must be able to trust the intentions of their chosen providers,” Georgia Attorney General Chris Carr said in the DOJ statement. “Those who instead take advantage of the system for their own personal gain will be held accountable.”

The investigation of Creative Hospice entities launched when a former employee responsible for marketing their services to health care providers and referral sources filed a whistleblower complaint alleging the kickbacks. Two additional whistleblower complaints were subsequently filed involving similar allegations of submitted false claims.

The case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the FBI, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) and the Medicaid Fraud Division of the Georgia Attorney General’s Office.

“Patients should not have to wonder if their doctors’ medical decisions are being driven by unlawful inducements,” said FBI Atlanta Special Agent in Charge Paul Brown. “We will continue to hold accountable individuals, as well as companies, who participate in kickback schemes that threaten the integrity of our health care system.”

Qui tam actions occur when a whistleblower, called a “relator” by the courts, files an FCA suit on behalf of the government. The relator has the potential to receive a portion of any funds recovered by the government via the lawsuit, with amounts typically ranging from 15% to 25%.

The relators who filed the three lawsuits against Creative Hospice entities have received more than $1.5 million from the settlement.

“A physician’s health care decision should be based solely on the needs of the patient rather than the physician’s financial interests,” said U.S. Attorney Theodore S. Hertzberg. “Health care providers who place unlawful personal gain above their duty of care to patients must be held accountable for their dishonesty.”

Whistleblower concerns have become increasingly complex for hospices to navigate in the current regulatory landscape.

Case in point, last year a federal judge recently found the qui tam clause unconstitutional, ruling that the relator’s role in sparking enforcement actions effectively makes them an executive branch officer appointed without due process. Though only one case, the outcome has the potential to introduce a new and possibly limiting precedent for whistleblowers’ ability to voice concerns, legal experts previously told Hospice News.