Lincare: Ventilator Rentals After Use Ended and the 2024 Admissions

In the Lincare ventilator settlement, Lincare Inc. agreed to pay $25.5 million over continued rental billing and coinsurance waivers. The company admitted that, in some instances, it kept seeking monthly payments even when it knew patients were not using their devices. For someone inside a respiratory equipment supplier, the question is concrete: what happened to the monthly bill after the clinical staff learned that use had stopped?

The Justice Department announced the resolution on February 15, 2024, after joining a False Claims Act case brought by two whistleblowers. A Lincare sales and patient care representative and a former respiratory therapist filed the case in 2018. Lincare supplied durable medical equipment through approximately 700 local centers nationwide. The case concerned non-invasive ventilators, which deliver pressurized air into the lungs of patients with respiratory failure and are often rented for use at home.

What Lincare Admitted About Ventilator Rentals

Lincare admitted that it continued submitting rental claims without confirming continued use and left available monitoring tools unused. Those admissions appear in the settlement agreement itself.

The business had a reason to grow. Lincare admitted that in 2015 it made expanding ventilator rentals a strategic priority, partly because expected Medicare reimbursement cuts would affect other business lines. Its local centers supplied ventilators on physicians’ prescriptions. In marketing to physicians, it offered clinical support through regular home visits to check patients’ progress and use.

A prescription described how the patient should use the machine, often during sleep. The rental bill required an ongoing account of what happened afterward. Lincare knew it was responsible for monitoring use and that federal health care programs required billing to stop when equipment was no longer medically necessary and no longer being used.

Lincare’s internal policy called for home visits at least every 60 days. During these visits, respiratory therapists were supposed to check settings, maintenance needs and actual use. The government alleged that Lincare missed the visits on tens of thousands of occasions and often failed to record usage even when someone went to the home. Lincare admitted that staff frequently missed the required visits, that some centers lacked enough staff, and that patients sometimes went several months without a visit.

The visits also served the patient. As the government complaint explains, regular monitoring could identify barriers to using the ventilator, help patients understand their treatment and give physicians information to reconsider a care plan. The government alleged that some physicians went uninformed about how their patients were using the equipment.

There was another way to see what was happening. Certain newer models allowed remote checks through online platforms. Lincare admitted it did not use those systems to confirm that patients were using the equipment as directed. The company had both a visit policy and, for some machines, a way to check use without a visit. The admissions describe monthly claims continuing while those checks went undone.

The Internal Audit That Found Billing After Use Fell Away

The government’s complaint alleged that Lincare’s own internal audit found only 10 of 56 ventilator patients at one center had consistently used their machines. The audit took place in 2018. For one patient, the audit report recorded the mismatch plainly:

The complaint alleged that, when therapists found patients had stopped using their ventilators or barely used them, branch employees and billing staff often failed to stop the claims or determine whether the rentals remained medically necessary. Lincare separately admitted that internal audits had identified beneficiaries who were not regularly using their devices.

The complaint’s patient examples go further. In one, a ventilator was removed from a Medicare patient’s home in July 2017, yet Lincare allegedly continued submitting monthly rental claims through November 2018. On the complaint’s account, the rental claims outlived the machine’s time in the home.

How Does Reimbursement Work for Medical Devices?

For the home ventilators in this case, reimbursement came through monthly supplier rental claims. Durable medical equipment has its own Medicare Part B billing codes. That payment route makes the supplier’s ongoing records of use central to each month’s bill.

The government complaint identifies E0464 and E0466 among the codes used for these rentals and says Lincare received as much as $1,400 per month during the period from 2013 to 2020. The complaint describes ventilators as equipment requiring frequent and substantial servicing, allowing rental billing over the machine’s full service life while the coverage conditions were met.

That is why the difference between a delivered device and a used device mattered every month. According to the complaint, the machines generally stored cumulative hours of use, much like an odometer. A therapist could compare readings at successive visits. Checking that a machine was still in the home and had the same settings did not establish how much the patient had used it. The government alleged that some visits amounted to little more than those checks.

The complaint covered claims involving Medicare and Medicaid, TRICARE, the Federal Employees’ Health Benefit Program and Amtrak’s health plan. The clinical order, the usage record and the rental claim performed different jobs. The order described the treatment. The usage record showed what the patient did. The claim sought payment. Lincare’s admitted failures sat between those steps, where information about use should have affected billing.

Coinsurance Waivers That Helped Win the Rental

Lincare admitted granting some coinsurance waivers to persuade patients to rent ventilators, without basing the waivers on financial need. The government alleged that regional vice presidents used partial or full waivers to persuade Medicare and TRICARE beneficiaries to choose Lincare over another supplier.

The complaint describes a regional vice president telling the chief operating officer that the practice was to negotiate every coinsurance payment when a patient said they could not or would not pay. The instruction to a center manager was shorter:

The next example in the complaint explains the economics. A center manager argued for a complete waiver because Lincare would still receive substantial monthly revenue and the patient came from an important referral source. The regional vice president approved it. The alleged decision was about preserving the rental business, while Lincare’s written policy required documentation of financial hardship.

The 2020 Journal of Forensic and Investigative Accounting paper A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud identifies routine or partial coinsurance waivers as a form of payment under federal anti-kickback law. The complaint shows the business reason for the waiver here. Lincare gave up the patient’s portion to help secure the rental and its continuing program payments.

The same pairing of a patient incentive and a separate billing problem appeared in Arriva Medical’s 2021 settlement. The government alleged free meters, copayment waivers and ineligible claims for diabetic supplies. The waiver helped attract the customer. Eligibility determined whether Medicare should pay the claim.

A different part of the respiratory supply business shows the same commercial pull. In Respironics’ 2016 settlement, the government alleged that the manufacturer provided free call-center services to suppliers for patients using its sleep-apnea masks, but charged based on the number using competitors’ masks. In that case, the supplier received the benefit. In Lincare’s ventilator case, the patient did. Both accounts show value tied to choosing whose equipment gets used.

Earlier Lincare Settlements

Earlier Lincare settlements concerned different billing and inducement practices.

HHS-OIG’s Lincare entry records a $5.25 million settlement announced August 16, 2018, over allegations of illegal price reductions offered to Medicare beneficiaries.

The oxygen-equipment settlement announced August 28, 2023 required Lincare Holdings to pay $29 million. Lincare admitted billing Medicare, Medicare Advantage plans and beneficiaries for rentals and copayments after receiving three years of oxygen-equipment rental payments.

The oxygen case concerned billing beyond a rental-payment limit. The ventilator case concerned continued use, medical need, documentation and inducements. Each reached the decision to keep charging through a different part of the supplier’s operation.

What Evidence Is Needed to Prove Fraud?

In Lincare’s ventilator case, the evidence connected what the supplier knew about use with the claims it kept submitting. This case shows those connections in internal audits, home-visit records, device usage information, billing records and waiver approvals. The government’s complaint also describes monthly internal reports circulated to executives in 2018 and 2019 showing thousands of required vent checks going undone. Those reports put the monitoring failures in front of management while the rental claims continued.

A respiratory therapist may know what a visit revealed. A billing employee may know whether that information changed the next claim. A center manager may know why a patient’s charge disappeared. The Lincare documents bring those views together: the clinical information, the money requested and the decision inside the business.

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

You Saw What Happened to the Rental Bill

If you saw claims continue after ventilator use stopped, or coinsurance waived to keep the rental business, speak with our whistleblower experts about the ventilator bills that kept going out. We build your strongest whistleblower case around the clinical facts, the billing decisions and who knew. We bring in durable medical equipment whistleblower lawyers who understand that billing operation and stay beside you through the case.