(Reuters) - Linde AG’s Lincare unit has agreed to pay $20 million to resolve a whistleblower lawsuit accusing the company of fraudulently billing the U.S. government for oxygen and respiratory care equipment.
The accord, confirmed by the U.S. Attorney’s Office in Massachusetts, will resolve a lawsuit filed under the False Claims Act by former employees of the respiratory therapy services provider on behalf of the U.S. government.
“The matter was resolved to the satisfaction of all involved parties, with no admission of liability by any party,” Lincare said in a statement.
Lincare, one of the largest U.S. providers of oxygen and respiratory therapy services and equipment, did not admit wrongdoing. Its settlement agreement was released late Monday after the deal received the U.S. Justice Department’s approval.
“Our clients are pleased the case has been settled and resolved and look forward to moving on with their lives and careers,” Daniel Oliverio, a lawyer for the former Lincare employees who pursued the case, said in a statement.
According to the lawsuit, Lincare since 2003 billed government health programs, including Medicare, for oxygen equipment and tanks even when customers did not use or require them, fabricated customer oxygen orders and improperly waived customer co-payments and deductibles.
The company also paid kickbacks to physicians and their families to refer patients by providing them oxygen and supplies for free, the lawsuit said.
In court papers, Lincare said it followed various regulations and said the lawsuit was at most challenging “garden variety” billing errors.
The case began as two separate lawsuits, one filed in 2009 by two former Lincare employees in New York state, SallyJo Robins and Kathleen Dunlap, and another in 2010 by Germano Lima and Roberto Rabassa, ex-employees in Massachusetts.
Under the False Claims Act, whistleblowers can sue companies on the government’s behalf to recover taxpayer money paid out based on fraudulent claims. If successful, whistleblowers receive a percentage of the recovery.
While the U.S. Justice Department can intervene in such lawsuits, in this case it did not, leaving the ex-employees to pursue it. The department’s approval was required to settle the case.
Under the deal, the U.S. government will receive $9 million. Another $11 million will go to the former Lincare employees to cover their share, plus attorneys’ fees and costs, according to the settlement agreement.
The case is U.S. ex rel. Robins, et al, v. Lincare Inc et al, U.S. District Court, District of Massachusetts, No. 10-cv-12256.
(This version of the story was refiled to remove paragraph 6 saying Linde did not respond to a request for comment)
Reporting by Nate Raymond in New York; Editing by Dan Grebler and Shounak Dasgupta