September 8, 2023
The U.S. Attorney for the Eastern District of Washington, Vanessa R. Waldref, recently announced that Lincare Holdings, Inc. (Lincare) agreed to the largest ever healthcare fraud settlement in the district. Lincare, a durable medical equipment (“DME”) provider, will pay $29 million to settle a False Claims Act case filed in 2021. In addition to the settlement payment, Lincare will implement substantial corrective measures to address allegations of fraudulent billing practices. The allegations stem from Lincare’s practices leasing oxygen equipment to Medicare beneficiaries.
Medicare Part B reimburses durable medical equipment (DME) providers like Lincare for lease payments on oxygen equipment. However, after three years of monthly lease payments, providers are required to continue supplying the equipment without additional rental payments. A similar rule applies to many Medicare Advantage Plans, limiting providers to three years of rental payments for oxygen equipment.
According to the government’s press release, Lincare provides oxygen equipment to individuals suffering from respiratory conditions like Chronic Obstructive Pulmonary Disease (COPD). This includes leasing oxygen tanks to assist patients in maintaining their respiratory health both at home and while traveling.
Two former Lincare employees filed a qui tam case in 2021 alleging that Lincare engaged in improper billing practices in violation of the False Claims Act. Specifically, the relators claimed Lincare improperly billed Medicare, Medicare Advantage Plans, and beneficiaries for oxygen equipment rental payments and co-payments after receiving three years of payments.
After the government intervened in the FCA suit, Lincare admitted the allegations and agreed to pay $29 million to settle the claims. The company also acknowledged that it lacked adequate controls to prevent these erroneous billings, even when employees raised concerns. Pursuant to the settlement, Lincare will refund overpayments to Medicare, as well as identify and repay beneficiaries who were improperly charged co-payments.
Additionally, Lincare has agreed to a five-year corporate integrity agreement, to implement billing software reforms, and to undertake an independent review of its billing practices. The whistleblowers will receive $5.6 million of the government’s recovery as their reward.
In announcing the settlement, U.S. Attorney Vanessa R. Waldref stressed that protecting its elder citizens is a government priority:
One of the most important responsibilities we have is protecting vulnerable members of our community such as the elderly. Elderly members of our community are among the most likely to be targeted by fraud, false billing scams, and abuse. This is one reason that the U.S. Attorney’s Office, the Department of Justice, and our law enforcement partners, have made combatting elder fraud and abuse a top priority.
-U.S. Attorney Vanessa R. Waldref
Assistant United States Attorney Dan Fruchter gave a specific “shout out” to the whistleblowers who filed the case:
I . . . want to recognize the two whistleblowers who came forward and provided vital information, making this result possible. We will continue to work hand-in-glove with courageous whistleblowers, as well as HHS-OIG and our other law enforcement partners, to protect patients and the community from fraud and abuse that targets the elderly.
As the attorneys within the Eastern District of Washington recognize, whistleblowers are a critical component to the government’s battle against health care fraud.
The Whistleblower Law Collaborative LLC is a top whistleblower firm. We devote our practice entirely to representing clients in bringing actions under the federal and state False Claims Acts and other whistleblower programs. Law360 named WLC a Health Care Group of the Year for 2022. Among the firm’s many successes is medical equipment fraud settlement with Regional Home Care, Inc. d/b/a North Atlantic Medical Services. If you know of medical device fraud, contact us for a free and confidential consultation.