Whistleblower discloses kickbacks

Posted on November 10, 2009 by Ray Mullman

Reuters had a brief article about a story that did not get much media attention.  Harborside Healthcare and HHC Nutrition Services will pay $1.375 million to resolve charges of taking kickbacks from a supplier, the Justice Department. The department accused Harborside, which Sun Healthcare Group (SUNH.O) bought in 2007, of taking kickbacks from McKesson Corp (MCK.N) and its affiliate MediNet Corp in exchange for Harborside buying medical equipment from them.

"There is a related action pending against McKesson and MediNet in the Northern District of Mississippi that remains ongoing," the department said. "In addition, the United States' investigation of similar conduct involving other DME (durable medical equipment) providers and nursing home chains is continuing."

The case was one that was broken by a whistleblower, who will receive $275,000 in reward. "We don't comment on ongoing litigation," said McKesson spokeswoman Ana Schrank.
 

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