April 16, 2018

Rotech Agrees to Pay $9.68 Million to Settle False Claims Act Liability Related to Improper Billing for Portable Oxygen

By the C|C Whistleblower Lawyer Team

The Justice Department announced a settlement last week for $9.68 million with Rotech Healthcare Inc. to settle charges of knowingly submitting false claims for portable oxygen contents to Medicare. The settlement included an admission by Rotech that is knowingly billed portable oxygen contents to Medicare for beneficiaries who neither used nor required them and that Rotech billed Medicare regardless of whether the contents were delivered.

Medicare pays for rentals of portable or stationary oxygen equipment for three years and allows suppliers of the equipment to bill monthly for the oxygen itself to be used with the equipment for two years after the rental period. Between January 2009 and March 2012, Rotech would automatically bill Medicare for the portable oxygen contents in the two years after the rental period without confirming whether beneficiaries actually used or needed portable oxygen. Rotech also did not obtain the required proof of delivery.

Joseph D. Brown, United States Attorney for the Eastern District of Texas said “Many people believe that healthcare fraud is a victimless crime; I assure you it is not. 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.”

Acting Assistant Attorney General Chad A. Readler, also the head of the DOJ Civil Division, said “This settlement serves as a warning to suppliers who bill first and ask questions later. We will investigate and take action against companies who cut corners and place profits over compliance with Medicare’s billing requirements.” The qui tam lawsuit was filed by Janet Hale a former employee in Rotech’s billing department. She will receive $1,645,600 as a relator’s share from the qui tam.

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