In The News

Florida-based Healthcare Company Agrees to pay More than $10 Million to Settle Alleged False Claims Act Violations

As we enter spring, the government continues to pursue people and entities who seek to defraud Medicare, Medicaid, TRICARE and other agencies designed to alleviate the pain and suffering of sick and injured Americans. One such case occurred earlier this month when the Justice Department announced that Rotech Healthcare Inc., a respiratory equipment supplier, has agreed to pay $9.68 million to settle charges that it knowingly submitted false claims to Medicare for its portable oxygen units. Rotech has also admitted that it billed these units to Medicare beneficiaries who did not use or require them. Finally, as part of the settlement, Rotech has admitted that it billed Medicare regardless of whether or not patients received the portable oxygen units.

“This settlement serves as a warning to suppliers who bill first and ask questions later,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “We will investigate and take action against companies who cut corners and place profits over compliance with Medicare’s billing requirements.”

Medicare covers the rental of portable and stationary oxygen equipment for a total of 60 month and allows suppliers to bill monthly for the oxygen to be used in those units. The government maintains that between January 2009 and March 2012, Rotech billed Medicare for portable oxygen contents for Medicare beneficiaries without verifying that the beneficiaries needed or used the equipment. Moreover, Rotech is alleged to have failed to provide the required proof of delivery for these units. Finally, the government alleges that during this time Rotech knowing submitted false claims for the portable oxygen contents units that they knew were ineligible for reimbursement.

“Many people believe that healthcare fraud is a victimless crime; I assure you it is not,” said United States Attorney Joseph D. Brown of the Eastern District of Texas. “Medicare is funded largely by you and me, the American taxpayers, and fraud contributes to runaway health care costs. I commend the whistleblower who had the courage to come forward and who worked with investigators to get to the bottom of this case. Because of her, we were able to recoup millions of dollars improperly paid to Rotech.”

The settlement reached in this case arose from a whistleblower lawsuit that was filed by Janet Hale under the False Claim Act. Hale is a former employee in Rotech’s billing department. Under the qui tam or whistleblower provisions of the False Claims Act, private citizens can engage whistleblower lawyers to represent them against alleged violators. Citizens who do come forward alleging False Claims Act violations are also entitled to a share in any recovery. Whistleblower Medicare cases have come into national prominence since the previous administration began its initiative to crack down on the fraud and abuse of government programs. As a result of the settlement, Ms. Hale will receive $1,645,600.