Lincare To Pay $29M to Settle Medicare Overbilling Healthcare Fraud Case

Florida-based Lincare Holdings has agreed to pay $29 million to settle allegations it overbilled Medicare and Medicare Advantage plans for oxygen equipment provided to patients with respiratory-related illnesses. The settlement, which is the largest ever healthcare fraud settlement in the Eastern District of Washington settles claims that Lincare violated the False Claims Act.

Lincare Agrees to Take Corrective Actions

The healthcare fraud settlement also calls for Lincare, a wholly owned subsidiary of Linde plc, a multinational chemical corporation based in Germany, to refund co-pays to patients and enter into a five-year corporate integrity agreement requiring “extensive†corrective actions “to ensure this conduct does not recur.â€

What is a Corporate Integrity Agreement?

Under a corporate integrity agreement providers must promptly notify the appropriate payor of all identified overpayments and must promptly repay the overpayment amount.

As part of those corrective actions, Lincare agreed to pay for and undertake an independent review of its claims and billing practices.  Lincare has also designed and implemented new billing software and other reforms to ensure that Lincare bills appropriately in the future.

Lincare Accepted Medicare Payments Illegally

Lincare provides oxygen equipment to patients. Between 2012 and 2023, Medicare reimbursed Lincare for the lease payments on oxygen equipment. However, after three years of monthly lease payments, Lincare was required to continue to provide the oxygen equipment but was no longer eligible for additional payments because Medicare had already reimbursed the companay for the full purchase price of the equipment. Between 2016 and 2023, many Medicare Advantage Plans adopted the same requirement that limited providers like Lincare to three years of rental payments for oxygen equipment. 

Complex Whistleblower Case

Assistant United States Attorney Dan Fruchter stated, “This was a complex case with novel issues, and this result would not have been possible without the hard work, investigative skill, and subject matter expertise of our partners with HHS-OIG. I also 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.â€

Lincare Admits to Lack of Proper Controls

As part of the settlement agreement in this landmark healthcare fraud case, Lincare admitted that it improperly billed Medicare, Medicare Advantage Plans (MA), and beneficiaries and that it lacked adequate controls to ensure that MA Plans and beneficiaries were not improperly billed after 3 years of rental payments had already been received. 

Lincare also admitted that for traditional Medicare recipients, it had controls in place to prevent improper billing, but that those controls didn’t always work.  Finally, Lincare admitted that when its own employees raised concerns about the company’s billing practices, Lincare officials in its Regional Billing and Collections Office located in Spokane Valley, Washington, and its corporate headquarters in Clearwater, Florida, instructed them that Lincare would continue its billing practices.

Allegations Grew Out of Whistleblower Case

The case was brought to the attention of investigators by two whistleblowers who worked in Lincare’s center in Libby, Montana. In 2021, they filed a qui tam action in the U.S. District Court for the Eastern District of Washington.

When a whistleblower or “relator,†files a qui tam complaint, the False Claims Act requires the government to investigate the allegations and decide whether to intervene and take over the action or to decline to intervene and allow the relator to go forward with the litigation on behalf of the United States. In this case, their complaint resulted in a joint investigation by the U.S. Attorney’s Office and the U.S. Department of Health and Human Services’ Office of Inspector General, which opted to intervene and take over the action.

In a whistleblower case, the relator is usually able to then share in any recovery. In this case, the relators will receive $5,655,000 of the total settlement amount.

Handling an Overbilling Case Requires Expertise

As happened in this case, the mishandling of overpayments can trigger a criminal fraud investigation or a civil action under the federal or state False Claims Act. Once an overpayment is identified, there are strict guidelines that must be adhered to when it comes to the appeals and recoupment process.

The Health Law Offices of Anthony C. Vitale has extensive experience representing clients in audits and overpayments and we can represent your interests through all of the stages of the overpayment appeals process in an effort to achieve the most successful results.

Known for Handling Whistleblower Cases

The Health Law Offices of Anthony C. Vitale is known for its representation of whistleblowers, as well as its ability to defend those who become the target of a whistleblower action. For more information call 305-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.