Yesterday, the Department of Justice announced that as Pacific Pulmonary Services will pay $11.4 million to settle a False Claims lawsuit. At issue in the case were allegedly false claims to Medicare and other federal healthcare programs for oxygen and related equipment supplied in violation of program rules, as well as claims for sleep therapy equipment tainted by a kickback scheme.
Pacific Pulmonary Services provides oxygen tanks—both station and mobile—and related supplies, as well as sleep-therapy equipment, to patients’ homes in California and other states. The government alleged that, beginning in about 2004, Pacific Pulmonary Services began billing government healthcare programs for these services without obtaining a physician authorization, as required by the programs’ rules. In addition, the government alleged that, starting in 2006, the company violated the Anti-Kickback Act by making patient referrals to sleep clinics in exchange for those clinics referring patients back to Pacific Pulmonary Services for sleep therapy equipment.
The lawsuit was initiated by Manuel Alcaine, a former sales representative for Pacific Pulmonary Services, under the qui tam provisions of the False Claims Act. Mr. Alcaine will receive over $1.8M pursuant to the those provisions.
“Home oxygen equipment and related supplies are some of the most fraudulently billed items of durable medical equipment,” said Special Agent in Charge Steven J. Ryan of the Office of Inspector General for the U.S. Department of Health and Human Services, in a statement released by the Department of Justice. “Medicare suppliers more concerned with profits than compliance will be met with investigation and enforcement.”
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