Lincare Holdings: Rental Caps and Overruled Employee Concerns

In the Lincare Holdings oxygen rental settlement, the company agreed to pay $29 million over billing Medicare, Medicare Advantage plans and patients for oxygen equipment rentals and co-pays after the payment limit. Lincare admitted that it kept billing after receiving three years of rental payments. It also admitted that when employees raised concerns, officials at its regional billing office and corporate headquarters told them the billing would continue. Of the settlement, $5,655,000 was allocated to the whistleblowers who helped expose the billing.

The Justice Department announced the settlement on August 28, 2023. Lincare Holdings, a Florida-based subsidiary of Linde plc, supplied oxygen tanks and home and portable concentrators to patients with respiratory ailments. Two former employees brought the False Claims Act case.

What Is the DME 36-Month Rule?

For oxygen equipment, the DME 36-month rule limits Medicare’s equipment rental payments while leaving the supplier responsible for continuing to furnish the equipment during medical need. The supplier keeps ownership, and the continuing obligation runs through the equipment’s remaining reasonable useful life.

That arrangement makes oxygen different from an ordinary capped rental. Under Medicare’s equipment payment law, a standard capped rental transfers ownership to the patient after its payment period. The oxygen supplier keeps its asset and the obligation attached to it. The equipment rental revenue ends before the job does.

Medicare can still pay for oxygen and eligible servicing after the cap, but those payments do not extend the equipment rent.

The settlement announcement explained the traditional Medicare rule for the period from 2012 through 2023: once the rental limit was reached, Medicare had already reimbursed the supplier for the full purchase price of the equipment. Yet Lincare kept charging rent and told employees who objected that it would continue.

An employee could therefore see equipment still in service and a patient still needing oxygen, while the equipment rental bill was supposed to have stopped. The patient’s continuing need and the supplier’s continuing right to collect rent were separate questions. That is the business distinction behind this settlement.

What Lincare Admitted About Medicare Billing

Lincare admitted improper rental billing and co-pay charges after the cap. It also described different failures in its controls for traditional Medicare and Medicare Advantage, a distinction that matters to anyone who works across payer accounts.

For traditional Medicare recipients, Lincare had controls intended to stop improper billing, but admitted those controls were not always effective.

For Medicare Advantage plans and their beneficiaries, Lincare admitted that it lacked adequate controls to prevent billing after the rental payments had already reached the limit. The Justice Department’s account of the admissions distinguishes that failure from the ineffective controls on the traditional Medicare side.

Between 2016 and 2023, many plans adopted the same oxygen rental limit. Under those plans’ rules, once the limit was reached, the supplier had to continue furnishing the equipment for its remaining useful life without further rental charges to the plan or co-pays to the beneficiary.

The payer distinction belongs inside the account history. We look at which plan’s rule applied, how much of the rental period had already been paid, and what the supplier charged afterward. Treating every account as interchangeable would miss the very difference Lincare admitted its controls failed to handle.

Patients were paying too. Improper co-pays took money directly from the people relying on the equipment, alongside the amounts charged to Medicare and the plans.

Employee Concerns Reached Spokane Valley and Clearwater

Lincare admitted that officials at its Regional Billing and Collections Office in Spokane Valley, Washington, and its corporate headquarters in Clearwater, Florida, instructed employees that the billing practices would continue after employees raised concerns.

The whistleblower case began with two former employees of Lincare’s center in Libby, Montana. They brought a qui tam case, and the United States later joined it. The Justice Department credited the whistleblowers with providing vital information.

Corporate Integrity Agreement: Outside Review of Billing

The settlement required a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General. Lincare had to implement a compliance and reporting program, make billing reforms and pay independent experts to review its claims and billing practices.

The Justice Department also reported that Lincare had designed and implemented new billing software and other reforms. The company committed to identify and repay beneficiaries from whom it had improperly collected co-pays, as well as refund Medicare overpayments.

These terms reached the machinery behind the recurring charges: how bills were generated, how claims were checked and how improper patient payments would be returned. Independent review mattered because the company had already admitted that its existing Medicare controls were not always effective. Having a control and having it stop an improper bill were different things in Lincare’s own account.

Which Lincare Settlement Is This?

This is Lincare Holdings’ August 2023 oxygen rental case. Other Lincare resolutions concern different products, conduct and company names.

Lincare Inc.’s August 2018 settlement concerned allegations of illegal price reductions to Medicare beneficiaries. A former billing supervisor brought that case. The allegation concerned reducing patient charges, whereas the Holdings oxygen case involved collecting co-pays after the equipment rental limit.

In a February 2024 settlement involving non-invasive ventilators, Lincare Inc. admitted that it sometimes sought monthly payments while knowing patients were not using the devices. It also admitted missed home visits required by its own protocols, failure to use available remote monitoring for certain devices, and claims without verification or documentation of continued use.

That ventilator case shows a different reason recurring respiratory-equipment bills should have stopped. The oxygen case turned on rental payments already received. The ventilator case turned on continued use and the checks meant to confirm it. In both, the admissions connect continuing bills to controls that failed to stop them.

What Evidence Is Needed to Report Medicare Fraud?

For oxygen rental overbilling, evidence needs to explain why the charges should have stopped and why they continued. Our whistleblower experts work with insiders to connect what they saw in the accounts and billing system with the decisions made above them.

How Much Is a Whistleblower Claim Worth?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In this case, the government expressly credited information from people who had worked inside the operation. Their view of the business helped expose charges reaching both public health care funds and patients’ own money.

When the Instruction Was to Keep Billing

If you saw oxygen rental charges continue past the payment limit, or know who overruled concerns about them, talk with our whistleblower experts about what happened inside the business. We build the case with you, bring in healthcare fraud whistleblower lawyers who understand durable medical equipment billing, and stay alongside you through the pursuit of a recovery.