Oxygen Billing Fraud: Claims After Use Ends and After the Oxygen Equipment Cap

Oxygen billing fraud includes knowingly charging Medicare for equipment rentals after the payment cap, or for oxygen contents patients no longer need, use or receive. Inside a respiratory supplier, the contradiction can sit between the patient file and the next monthly claim. The rental payments have reached their limit. The patient has stopped using the oxygen. The contents were never delivered. Billing carries on, and the employee who sees the discrepancy may also know who decided to leave it that way.

Taxpayers fund the claims, and patients can face copays they never owed. Lincare Holdings admitted collecting those copays after the equipment rental cap, taking money from the people the health care program serves.

What Is the DME 36-Month Rule?

For oxygen equipment, the thirty-six-month cap ends the rental payments, while the usual five-year service obligation keeps the supplier responsible for furnishing equipment during medical need. The supplier retains ownership. The patient can still need the equipment after the rental payments have stopped.

The Social Security Act’s oxygen payment provisions separate payment for the equipment from payment for oxygen and reasonable, necessary maintenance and servicing. Equipment rental payments stop at the cap. Oxygen payments continue during medical need. Maintenance and servicing payments depend on whether the work is reasonable and necessary.

That distinction matters to the person looking at an active account. A supplier can still have a patient to serve and equipment to maintain without another equipment rental payment to collect. The machine remains its asset, and keeping it available to the patient remains its job.

Home oxygen also includes different products. A stationary concentrator rental and portable gaseous oxygen contents occupy separate billing categories. The equipment history answers how long the rental has been paid. The contents record answers what oxygen was supplied.

Medicare Advantage adds the payer’s rules to that comparison. In the period covered by Lincare’s oxygen settlement, many Medicare Advantage plans adopted the same rental limit while setting their own reimbursement and copay rules. The Justice Department described plans that required continued equipment service after the cap and prohibited further rental charges to the plan or copays to the patient.

When the Patient Stops Using Oxygen

An oxygen supplier billing after a patient discontinues treatment may be charging for contents the patient no longer uses or needs. The question is what the supplier knew about that change and whether billing changed with it.

A separate ventilator case shows how directly an employee can see that disconnect. In a complaint against Oxygen Plus, a respiratory therapist alleged that:

The therapist alleged that the devices sat unused while the company kept seeking payment. The person visiting the home and the person processing the claim can hold different pieces of the same story.

Portable Oxygen Contents Have Their Own Billing Record

Portable oxygen contents are separately billable supplies with their own need and delivery questions. Having equipment in the patient’s home does not establish that the supplier delivered the contents it charged for.

In April 2018, Rotech Healthcare agreed to pay $9,680,000 to settle its False Claims Act liability. The company admitted knowingly billing Medicare for portable oxygen contents that beneficiaries did not use or require. It also admitted billing regardless of whether the contents were delivered.

The settlement concerned the oxygen supply itself, a different charge from Lincare’s equipment rentals after the cap.

For a delivery or billing employee, that makes the contents record consequential. An equipment setup can explain why the patient has an account. It cannot show what was delivered later. The delivery history, the patient’s continuing need and the contents claims have to tell the same story.

The Rotech case began with a former employee in its billing department, whose share of the recovery was more than $1.6 million. Someone processing the claims was positioned to recognize what the monthly charges represented and what was missing behind them.

Does an Oxygen Claim Need an Old CMN After January 2023?

No. The Centers for Medicare & Medicaid Services removed the certificate of medical necessity requirement for dates of service on or after January 1, 2023. The documentation policy retained the standard written order and supporting medical record. Retiring the form did not retire the need for those records to support the claim.

The oxygen coverage policy changed too. Inogen’s annual filing describes the revised national coverage policy, implemented January 3, 2023, which expanded access to oxygen for acute or short-term needs.

For historical billing, the relevant question is what the claim required when the supplier provided the item. An old CMN belongs with the claims from the period when it was required. For later claims, the order and clinical documentation still have work to do: explaining the patient’s need and supporting what the supplier billed.

This matters particularly when the patient file spans the policy change. A historical form, a later order and a continuing monthly charge describe different events. We connect the documents to the service dates and the billing decision, including what the supplier knew about the patient’s continuing need.

What Is an Example of DME Fraud?

Lincare’s admitted oxygen rental overbilling is an example of durable medical equipment fraud that reached both government payments and patients’ own money. In its August 2023 settlement with the Justice Department, the company agreed to pay $29 million after billing Medicare, Medicare Advantage plans and beneficiaries beyond the equipment rental cap.

Lincare admitted that its controls for Medicare Advantage plans and beneficiaries were inadequate. It had controls for traditional Medicare, but they did not always work.

The most revealing admission concerned what happened when employees spoke up. Officials in Lincare’s regional billing and collections office and at corporate headquarters told them the company would continue its billing practices. The employees had identified a problem. Management’s answer was to keep billing.

The resolution addressed the patients’ copays as well as the government’s money. Lincare committed to identifying and repaying beneficiaries from whom it had improperly collected copays. It also implemented new billing software and entered a five-year corporate integrity agreement requiring an independent review of claims and billing practices at its expense.

Two former employees from Lincare’s Libby, Montana, center brought the whistleblower case, and the government joined it. The Justice Department announced about $5.7 million from the settlement as the whistleblowers’ share.

What Evidence Is Needed to Report Medicare Fraud?

For oxygen billing, useful evidence shows the gap between what the supplier knew about the patient’s need, payment history or deliveries and what it kept charging. Our whistleblower experts work with you to connect that gap to the decisions inside the business.

An employee who raised the discrepancy may also know how the company answered it. Lincare’s admission shows why that answer matters.

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.

The strength of an oxygen billing case comes from connecting the recurring charges to the facts behind them. We assess that connection with you, including the supplier’s response when someone inside the business pointed it out.

When the Account Keeps Billing

If you know why oxygen rental charges survived the cap or why contents claims continued without use or delivery, speak with our whistleblower experts about building your strongest oxygen billing case. We work beside you to build the case around the patient records, the payments and the decisions inside the supplier. We bring in whistleblower lawyers who know oxygen reimbursement and durable medical equipment fraud, and stay with you through the case.