Respiratory equipment supplier Rotech Healthcare, Inc., has agreed to settle False Claims Act Allegations for $9.68 million. Moreover, as part of the settlement agreement, the company admits that it knowingly billed Medicare for portable oxygen tanks (contents) that patients didn't need or use -- and regardless of whether the tanks were actually delivered.
A whistleblower originally initiated the suit under the False Claims Act, which allows private citizens to sue on behalf of the government when they have evidence of fraud, waste or abuse in government contracts. The whistleblower, a former employee in the company's billing department, will receive a $1,645,600-share in the recovery.
Medicare initially covers oxygen equipment for up to 36 months. After that, oxygen can be billed monthly for up to 24 additional months.
According to the Department of Justice, once the initial 36-month period, Rotech automatically billed Medicare for portable oxygen tanks for all its Medicare beneficiaries. It didn't verify if those patients actually needed or used the oxygen, and it didn't obtain proof of delivery as required by the program. Rotech knew that these practices resulted in the submission of false claims and claims that were not reimbursable, but it continued them nonetheless.
"Many people believe that healthcare fraud is a victimless crime; I assure you it is not," commented a U.S. attorney who was involved in the case. "I commend the whistleblower who had the courage to come forward and who worked with investigators to get to the bottom of this case," he added. "Because of her, we were able to recoup millions of dollars improperly paid to Rotech."
"This settlement serves as a warning to suppliers who bill first and ask questions later," said the 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."
If you, like this whistleblower, are in a position to notice false claims against a government program, you could receive a substantial reward for reporting the misconduct and, potentially, filing a False Claims Act lawsuit. However, you should protect your rights and ensure you are eligible for that reward by working with an attorney familiar with False Claims Act whistleblowing.