$29M Medicare overbilling settlement largest ever for health fraud in the region

(The Center Square) – A Florida-based company has agreed to pay $29 million to resolve a whistleblower complaint pursued by federal authorities in overbilling Medicare for oxygen equipment provided to patients with respiratory ailments.

The agreement with Lincare Holdings Inc. was announced Monday in Spokane by U.S. Attorney Vanessa Waldref, who said it was the largest-ever health care fraud settlement in eastern Washington.

Lincare does business at its satellite offices in East Wenatchee and Omak.

“My office prioritizes protecting vulnerable members of our community, including the elderly, who are among the most likely to be targeted by fraud, false billing scams, and abuse,” Waldref said in a video statement. “I am proud to announce a $29 million settlement with Lincare Holdings, where Lincare has admitted to wrongfully collecting co-pays from elderly Medicare beneficiaries on fixed incomes.”

In addition to the $29 million payment, the settlement also calls for Lincare to refund wrongfully obtained co-pays to individuals and enter into a five-year corporate integrity agreement requiring “extensive” corrective actions “to ensure this conduct does not recur,” said Waldref.

Lincare Holdings is a wholly owned subsidiary of Linde plc, a multinational chemical corporation based in Germany.

According to the U.S. Attorney's Office, Lincare provides portable and home oxygen equipment to patients with respiratory ailments such as chronic obstructive pulmonary disease, or COPD. Between 2012 and 2023, Medicare reimbursed Lincare and other providers for patients’ monthly lease payments for up to three years, when the equipment purchase costs were considered fully paid.

After three years, Lincare and other similar companies were still required to provide oxygen equipment to patients, but no longer entitled to collect the additional rental payments. The Medicare policy applied to many supplemental medical insurance plans, called Medicare Advantage or Medicare Part C plans, offered by private insurance companies.

In the settlement, Lincare admitted to improperly billing Medicare, Medicare Advantage providers, and their beneficiaries beyond the maximum three-year payment period.

“I am appalled by Lincare’s admitted past practice of putting profits before its obligations to patients and to the Medicare program, and in particular by Lincare’s admitted improper practice of wrongfully collecting co-pays from elderly beneficiaries on fixed incomes and with limited means,” Waldref said in a separate news release Monday.

However, Waldref also said she was “… heartened that, following our investigation, Lincare stepped up, accepted responsibility, and committed to make things right, not only by refunding overpayments received by Medicare, but by identifying and repaying any beneficiaries from which it improperly collected co-payments.”

The settlement resolves Linacre’s violations of the federal False Claims Act, Waldref said. As part of the agreement, Lincare must also pay for independent reviews by experts to ensure that the company’s internal billing reforms and reporting requirements are followed.

The case began in May 2021 when two former employees at Lincare’s center in Libby, Montana raised concerns. According to authorities, they were instructed by company officials at Lincare’s regional office in Spokane Valley and corporate headquarters in Florida that the wrongful billing practice would continue. The employees then filed a whistleblower complaint under seal with the U.S. District Court for the Eastern District of Washington.

That spurred a joint investigation by the U.S. Attorney’s Office and the U.S. Department of Health and Human Services’ Office of Inspector General, with the agencies opting in July to intervene and take over the action.

Calling it a “complex case with novel issues,” Assistant U.S. Attorney Dan Fruchter applauded the “exceptional investigative and analytical work” performed by the Office of Inspector General.

“I also want to recognize the two whistleblowers who came forward and provided vital information, making this result possible,” said Fruchter. “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.”

The whistleblowers, called “relators,” are generally entitled to share in any financial recovery. In the Lincare case, the settlement agreement calls for the relators to receive nearly $5.66 million of the total amount, authorities said.

“We are hopeful that with the implementation of a Corporate Integrity Agreement, Lincare will invest in controls to ensure that all plans are billed appropriately. HHS-OIG is committed to protecting federal health care programs from fraudulent and wasteful practices at the hands of providers,” said Steven J. Ryan, special agent in charge for the inspector general’s office of HHS.