Apria: The Billing Continued After Patients Stopped

The Apria False Claims Act settlement required the company to pay $40.5 million to resolve allegations of improper non-invasive ventilator rental billing, including billing for devices patients were not using. Apria admitted that it often kept seeking payment even after receiving information that patients had stopped using their ventilators. For a respiratory therapist or billing employee, that is the connection at the heart of this case: what happened in the patient’s home, what reached the branch, and what kept appearing on the monthly claim.

At the time of the settlement, Apria operated approximately 300 durable medical equipment branches across the United States. The government’s allegations covered January 1, 2014 through December 31, 2019 and claims to Medicare, Medicaid, TRICARE and the Federal Employees’ Health Benefits Program. The Justice Department’s settlement announcement describes Apria’s admissions about continued billing, the choice of respiratory equipment and copay waivers used to attract or retain rental customers.

Why Apria Wanted More Ventilator Rentals

Apria admitted that it made growing its non-invasive ventilator rental business a priority in early 2014 because its internal analysis expected Medicare reimbursement of approximately $1,400 per month. Every month, the bill depended on whether the patient still used the machine.

The equipment reached patients through physicians’ prescriptions. Apria supplied the ventilators and submitted rental claims to the health care programs. Its promotional materials said respiratory therapists would visit patients regularly to assess whether they used their devices as their physicians directed. Apria relied on those therapists in its branches to monitor use.

The Justice Department’s account of its complaint alleged that Apria expanded without enough respiratory therapists to perform that monitoring. It alleged that Apria routinely billed while it did not know whether patients still used their devices, and often kept billing even when it had information that use had stopped.

What Apria Admitted About Continued Billing

Apria admitted that its respiratory therapists often missed the visits needed to confirm continued use, while the company kept seeking monthly rental payments. Its own internal billing guidance said Apria was responsible for monitoring rented equipment and that Medicare required billing to stop when the patient no longer used it.

The company had measured the shortfall. A January 2017 internal analysis found that, during December 2016, therapists had failed to complete more than half the visits required by Apria’s clinical procedures across all three operational zones. Later that year, an executive informed a member of executive leadership that the clinical team believed a meaningful proportion of required home visits were not happening.

The admissions also describe what happened when a therapist did reach the patient and brought back information that should have changed the billing:

We see a company that could keep the monthly bills going while its promised home visits went undone. Even a visit confirming that the patient had stopped using the machine often failed to stop the bill.

In June 2017, Apria introduced a policy directing therapists to take steps that could include stopping billing and beginning discharge when they encountered patients who were not using their devices. Apria admitted that inconsistent training meant a number of branches did not meaningfully implement that policy. Those branches failed to consistently stop billing for unused ventilators.

PAC Mode and the More Expensive Machine

Apria admitted that its salespeople frequently promoted the more expensive Astral ventilator in PAC mode without telling physicians that a cheaper device offered that therapy. The agreement identifies that alternative as the VPAP S9 respiratory assist device, called the VPAP RAD in the case.

Non-invasive ventilators can adjust the pressure of air delivered to a patient. PAC mode supplies bi-level pressure support, a setting available on both the Astral ventilator and the cheaper VPAP S9 respiratory assist device. In 2015, Apria encouraged its sales staff to actively promote Astral orders using PAC mode.

The Astral had additional features that the VPAP RAD lacked. Apria admitted that the orders in question typically did not prescribe use of those features. On a number of occasions, it rented Astral ventilators to patients whose needs the cheaper device may have met.

The government alleged that these PAC-mode rentals did not qualify for reimbursement at the ventilator rate. For an insider, the useful comparison is concrete: the therapy the physician ordered, the machine the supplier provided, the alternative the salesperson discussed, and the rental claim submitted for that patient.

Copay Waivers Became a Sales Tool

Apria admitted that managers at a number of branches directed salespeople to discuss copay waivers before patients had even raised concerns about affording their payments. Some managers authorized waivers to persuade patients to choose Apria over other durable medical equipment suppliers.

The same offer could keep a rental going. When patients wanted to cancel, managers often had salespeople discuss waiving future copays to persuade them to keep their ventilators. Apria also admitted that changes to its waiver policy were expected to concentrate waivers on ventilator patients, rather than patients renting less expensive equipment.

During the covered period, Apria gave full copay waivers to hundreds of ventilator patients without assessing whether they could afford part of their copay obligations. The government alleged that waivers induced Medicare and TRICARE beneficiaries to rent the equipment, or healthcare providers to prescribe it, without individualized financial-need determinations.

The patient might hear an offer of help with a bill. Inside the branch, Apria’s admissions describe decisions about winning and retaining rental business. The waiver was part of the pitch to take business from competing suppliers.

The Evidence Between the Home Visit and the Claim

The evidence in a False Claims Act case connects what the supplier knew about a patient to the payment it requested. Apria’s agreement makes those connections unusually specific: visit-completion analysis, information from home visits, internal billing guidance, equipment orders and managers’ instructions about copays.

A respiratory therapist may know that a patient stopped using a ventilator and that the branch received that information. A billing employee may know whether the rental stayed active afterward. A salesperson may know what physicians heard about the equipment options, or why a manager authorized a waiver. We work with the insider to connect those different views of the same rental.

Apria admitted that it understood the applicable billing requirements. It also admitted receiving federal reimbursements for some rental claims that did not comply with those requirements.

Lincare and the Decision to Stop a Monthly Claim

Lincare agreed to a $29 million settlement over oxygen-equipment rental billing beyond applicable payment limits. Its settlement agreement records an admission that it kept submitting claims to Medicare Advantage plans with a 36-month rental cap until the plans denied the claims as capped. Employees who raised concerns were told that continuing until denial was the nationwide practice.

Apria’s case concerned continued use and medical need. Lincare’s concerned a limit on rental payments. The shared operational question is who stops the next monthly claim and what information makes that happen. In Lincare’s case, the company admitted that its controls left the insurer to trigger that stop.

The Whistleblower Case and the Settlement Terms

Three former Apria employees brought the qui tam case in 2017. The government joined the case and filed its own complaint as part of the settlement.

The Southern District of New York’s Civil Frauds Unit handled the case. The Department of Health and Human Services’ inspector general, the Defense Criminal Investigative Service and the Office of Personnel Management’s inspector general conducted investigative work, with extensive collaboration from the Washington State Medicaid Fraud Control Unit.

As part of the settlement, Apria entered a corporate integrity agreement that required board oversight and independent claims review. That oversight reached the same place the case exposed: the company’s responsibility for the claims its branches sent for payment.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Why the Rental Stayed Active

If you know who kept billing after a patient stopped using a ventilator, speak with our whistleblower experts. We build the case with you around the clinical information, sales decisions and payment claims, and bring in healthcare fraud whistleblower lawyers who understand durable medical equipment billing. We stay beside you through the case, starting with what you saw between the home visit and the next bill.