Repeat DME Settlements: What Changed Between the First Resolution and the Next

Repeat DME fraud settlements can concern different products, payers and billing practices at the same company. An oxygen supplier can face one case over payments after a rental cap and another over equipment patients stopped using. A wheelchair supplier can face one over the price it reported and another over who wrote the medical evaluation. If you work in billing, sales or compliance, those differences point to the records and decisions behind the next claim.

For a DME company settlement, overlapping conduct periods matter as much as repeated announcements. The date a company pays and the dates it billed answer different questions. Respironics, Lincare, Joint Active Systems and Numotion show why the product, payment rule and period belong beside the settlement amount.

Respironics and Philips Settled Different Manufacturer Practices

Respironics’ settlements concern what a manufacturer allegedly gave suppliers to encourage use of its equipment. The value could take the form of a service, sales information or financing.

In March 2016, Respironics agreed to pay $34.8 million over allegations that it supplied free call-center services to durable medical equipment suppliers buying its sleep-apnea masks. The alleged inducement reduced a supplier’s operating costs while encouraging it to choose the manufacturer’s product.

The September 1, 2022 resolution named Philips RS North America, formerly Respironics. It provided $22.62 million to the United States and $2.13 million to states for their Medicaid programs. The whistleblower’s complaint alleged that Respironics bought valuable prescribing data and gave it to suppliers, helping them identify physicians to approach for sales and encouraging recommendations of Respironics products.

That complaint also alleged that employees raised concerns about the data being an inducement. A manager’s response, as quoted in the complaint, was:

The alleged response changed how customers received the information. It still gave them the information.

A separate settlement that September 22 required $1,283,825. The government alleged that Respironics helped a supplier obtain a twelve-month, interest-free loan and backed the loan itself. Philips Respironics later agreed to another civil settlement on December 22, 2023, for $2,471,359 over alleged kickbacks.

The 2022 resolutions included a five-year corporate integrity agreement with the Department of Health and Human Services’ Office of Inspector General and an independent monitor selected by the agency. The agreement took effect on August 25, 2022.

Lincare’s Three Resolutions Covered Different Products and Billing Questions

Lincare’s resolutions changed both the equipment and the billing question. Its August 2018 settlement was $5.25 million over alleged illegal price reductions to Medicare beneficiaries. The covered conduct ran from 2011 through 2017. A five-year corporate integrity agreement took effect in August 2018.

The August 2023 oxygen settlement was $29 million and covered oxygen overbilling from 2012 through 2023. Lincare admitted billing Medicare, Medicare Advantage plans and beneficiaries for oxygen equipment rentals and copayments after receiving three years of payments.

The oxygen payment rule explains the business pressure. Equipment payments end after 36 months, but the supplier must keep furnishing equipment during medical need for the rest of its useful lifetime, generally five years. The rental revenue stops before the equipment obligation does.

Lincare admitted that its controls for Medicare Advantage plans and beneficiaries were inadequate and that its traditional Medicare controls were not always effective. It also admitted that employees raised billing concerns and that officials in its regional billing office and corporate headquarters instructed them that the practices would continue. The concern reached the people who could change the billing. Their instruction was to keep it going. Patients and health care programs kept getting bills that Lincare admitted it should not have sent.

That resolution brought another five-year corporate integrity agreement, effective in August 2023, with independent claims and billing review at Lincare’s expense.

In February 2024, Lincare agreed to pay $25.5 million over non-invasive ventilator rental billing and coinsurance waivers. It admitted seeking monthly payments in some instances when it knew patients were not using the devices. It also admitted failures to make the patient visits its own policy required and to use available remote-monitoring systems to confirm use of certain newer ventilators.

The government’s allegations in that case covered January 2013 through February 2020. That period overlapped the oxygen matter and ended before the oxygen settlement.

For someone inside a respiratory supplier, the distinction is concrete. The oxygen case turns on the rental-payment history and the billing controls. The ventilator case turns on continued patient use, monitoring records and what staff knew when monthly claims kept going out.

Joint Active Systems Settled Again Over North Carolina Medicaid Claims

Joint Active Systems, a manufacturer of range-of-motion devices, appeared in separate resolutions involving an orthotics provider and North Carolina Medicaid. The first settlement, announced in December 2020, required $1.5 million from Joint Active Systems and $90,000 from New England Orthotics & Prosthetics, a clinic chain. Two former clinic employees brought the whistleblower case. They were to receive 17% of the recovery.

In February 2023, Joint Active Systems agreed to pay $500,000 to resolve allegations that it caused false claims to North Carolina Medicaid for certain durable medical equipment.

The employees behind the earlier case worked at the clinic. Their position matters to someone who sees a manufacturer’s role through the orders and claims handled by another business. A manufacturer case can begin with knowledge from the provider buying its equipment.

Numotion’s Discount Case and Evaluation Case Follow Different Records

Numotion’s March 2023 settlement concerned the equipment’s reported cost. The national supplier paid $7 million to resolve allegations involving manually priced equipment reimbursed by Medicaid programs in Kentucky, Missouri and the District of Columbia, including two Kentucky managed-care contractors.

Those programs based reimbursement on what Numotion actually paid the manufacturer. The government alleged that Numotion failed to disclose all manufacturer discounts or its actual costs, producing higher reimbursements than it was entitled to receive. The relevant comparison was between the manufacturer’s charges after discounts and the cost presented to the payer. A wheelchair could reach the patient while the supplier still overstated the amount on which Medicaid calculated payment.

Numotion entered a five-year corporate integrity agreement requiring a centralized risk assessment program and annual independent reviews of some Medicare and Medicaid claims. It took effect on January 31, 2023. A former employee brought the whistleblower case.

The August 2024 settlement was $13.5 million and resolved three whistleblower cases filed in Arizona. The government alleged that claims rested on patient evaluations unlawfully written, completed or signed by Numotion employees instead of qualified medical professionals.

One whistleblower complaint describes the gap between a signature and an evaluation:

The alleged exchange puts the person who prepared the form beside the person who signed it. The pricing case follows purchasing costs into reimbursement. The evaluation case follows the clinical paperwork behind the order. Someone working in either part of the business may see a different reason the claim should never have gone out as submitted.

What the Settlement Sequence Shows an Insider

The useful comparison connects the claim to the product, payer, period and decision inside the company. Lincare’s admissions about billing concerns show why an employee’s account can matter even when the company already has formal controls. Numotion’s resolutions show why purchasing records and clinical evaluations can expose different problems at the same supplier.

HHS-OIG’s Medicaid Fraud Control Units Fiscal Year 2023 Annual Report, published in 2024, found that medical-device manufacturers and durable medical equipment suppliers accounted for more civil settlements and judgments than other provider types in that year’s comparison.

The agency’s Medicaid Fraud Control Units Fiscal Year 2014 Annual Report, published in 2015, explains that a case involving federal and state governments can produce separate settlements between the defendant and participating states. Respironics’ federal and state payments illustrate that structure.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The employee’s contribution is the knowledge behind the claim: what the invoice omitted, who prepared the evaluation, which patients stopped using equipment or who decided to keep billing after concerns were raised.

You Know What Changed Inside the Company

If you know which billing practices changed after a settlement and which kept going, speak with our durable medical equipment whistleblower experts about the billing you see. We build a case strategy around your knowledge of the claims and the decisions behind them, and bring in healthcare fraud whistleblower lawyers who understand equipment billing. We stay beside you through the case, including the questions an earlier resolution raises for yours.