Lincare Inc.: The 2018 Settlement Over Patient Discounts
Lincare Inc. paid $5.25 million in its 2018 settlement over allegations that it reduced patients’ bills to win Medicare Advantage business. The alleged beneficiary discounts concerned the part of the bill the patient owed: coinsurance, copayments and deductibles. A former billing supervisor brought the case, putting decisions inside the billing department at the center of a federal health care fraud settlement.
The Justice Department announced the settlement on August 16, 2018. Lincare, headquartered in Clearwater, Florida, supplied oxygen and other respiratory therapy services to patients at home through approximately 1,000 locations across the United States. The government alleged that its patient discounts violated the Anti-Kickback Statute and caused false claims for Medicare payments.
Beneficiary Discounts as a Competitive Advantage
From 2011 through 2017, the government alleged, Lincare waived or reduced the amounts owed by beneficiaries in a Medicare Advantage plan operated through a private insurer. The alleged purpose was to gain a competitive advantage in the durable medical equipment market. In the government’s account, the patient’s lower bill was the selling point.
That matters in a business where the patient and the insurer both have a place in the payment transaction. Medicare Advantage beneficiaries receive their Medicare benefits through a private health insurance plan. As the Justice Department explains in its later account of Lincare’s oxygen billing, those plans can set their own reimbursement and beneficiary copay rules.
For a billing employee, the useful comparison runs from the plan’s payment terms to the patient’s balance. Reducing that balance changes what it costs the patient to choose the supplier. In the government’s account of the discount case, Lincare used that reduction to compete for business that generated Medicare claims.
A competing supplier collecting the required patient share would have to compete against the reduced bill alleged here. The government alleged that Medicare paid false claims for the resulting business. Taxpayers funded the alleged competitive advantage.
A Billing Supervisor Brought the Illinois Case
A former Lincare billing supervisor brought the allegations to light through a qui tam case filed in the Southern District of Illinois.
A person working with patient balances can see the difference between what the plan requires and what the supplier actually collects. They may also know how a reduction was authorized, whether it recurred and what employees were told to say to patients. That knowledge can connect an apparent billing adjustment to a decision to win business.
Public claims data offer a different view. Medicare’s public supplier files cover fee-for-service claims. There is no equivalent public supplier file for Medicare Advantage. An insider’s account of the plan, the patient balance and the decision to reduce it can explain something a public supplier-payment search cannot show.
In a beneficiary-discount case, we examine the payer terms, patient accounts and instructions behind the adjustments together. An explanation given to a patient may show how the discount was presented. An approval or collection instruction may show who authorized it and why. We connect those decisions to the claims for the resulting equipment business.
Lincare’s 2018, 2023 and 2024 Settlements Covered Separate Conduct
In the separate 2023 oxygen settlement, Lincare Holdings agreed to pay $29 million and admitted billing Medicare, Medicare Advantage plans and beneficiaries after receiving three years of rental payments. In its 2024 $25.5 million settlement concerning non-invasive ventilators, Lincare Inc. admitted sometimes seeking payments while aware that patients were not using the devices and granting some coinsurance waivers to persuade patients to rent ventilators without basing those waivers on financial need.
What Is the Reward for a Medicare Fraud Whistleblower?
A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In Lincare’s beneficiary-discount case, the former billing supervisor’s announced award represented about 18% of the settlement proceeds.
You Know Why the Balance Changed
If you saw patient balances reduced to secure equipment orders, talk with our whistleblower experts about the billing decisions. We develop the case with you, bring in healthcare fraud whistleblower lawyers who understand supplier billing and beneficiary inducements, and stay beside you as the case moves forward.
