Respiratory Equipment False Claims Cases: The Machine Sat Unused but the Bills Kept Coming

Respiratory equipment false claims settlements expose different failures behind a monthly bill: a ventilator the patient did not need, oxygen contents billed whether or not they were delivered, or rental claims that kept going after payment should have stopped. A respiratory therapist may see an unused machine. A biller may see the rental history. A sales employee may know why a particular device was ordered.

In durable medical equipment fraud, the claim can go wrong at the order, delivery or monthly billing stage. Patients and taxpayers can keep paying for a machine nobody uses.

CPAP, Ventilators and Oxygen Follow Different Payment Rules

Medicare’s payment category determines how long equipment rental payments continue and who owns the device afterward. Under the Medicare equipment payment law, a CPAP device follows a 13-month capped rental ending in patient ownership. A home ventilator falls into the category for equipment requiring frequent servicing, with monthly rental payments and no equivalent cap or transfer of ownership.

Oxygen equipment has a 36-month payment cap. The supplier keeps ownership and must continue furnishing the equipment during medical need for the rest of its useful lifetime, generally five years. Medicare can pay separately for the oxygen itself and for eligible maintenance and servicing. The obligation to keep equipment in a patient’s home outlasts the right to collect equipment rent.

The payment incentive has a long history. Testimony in Waste, Fraud, and Abuse, the House Ways and Means Committee’s 2003 hearing described equipment fees tied to suppliers’ historical charges rather than current market prices. For the business, the machine’s acquisition cost and the revenue its billing category permits are different questions.

Ventilator Claims That Did Not Match the Patient’s Treatment

Medical need and device classification produced different allegations against SuperCare, AdaptHealth and Oxygen Plus. One concerns whether the patient needed ventilator services. Another concerns whether the supplier billed ventilator rates for something else.

SuperCare and Medical Necessity

SuperCare Health agreed to a $3,315,308 settlement in August 2021 with the United States, California and Nevada over allegations that it billed for ventilator services that were not medically necessary or reasonable. A respiratory therapist who worked for the company brought the whistleblower case.

AdaptHealth and BiPAP Billed as Ventilator Equipment

AdaptHealth, formerly QMES, agreed to a $5.3 million settlement in April 2023. The former employee’s complaint alleged that the company billed Medicare for ventilators while providing BiPAP devices. It also alleged that patient records were falsified to justify the upcoding and that managers directed continued billing without notifying payers.

The complaint describes what allegedly happened when patient charts reached a health plan: a compliance officer asked the employee to tell the plan that the charts had been sent by mistake and should be discarded. The employee refused.

Oxygen Plus and the Search for Ventilator Patients

Oxygen Plus agreed to pay $200,000 in October 2023 over allegations of billing Medicare and Medicaid for respiratory devices patients did not need or use. Its whistleblower complaint describes how existing customers allegedly became ventilator customers:

The complaint alleges that the company then pressured health care providers to write orders. A respiratory therapist reported finding ventilators sitting unused during home visits while billing continued. The alleged sequence began with the supplier’s customer list and ended with a recurring claim. The device’s presence in the home answered only the delivery question.

Delivery and Respiratory Care Are Separate Parts of the Claim

Rotech’s case concerned portable oxygen contents billed regardless of delivery. The North Atlantic Medical Services case concerned the qualifications of the people providing respiratory services. Both reached beyond whether a physician had ordered equipment.

Rotech Admitted Billing Regardless of Delivery

Rotech Healthcare agreed to a $9.68 million settlement in April 2018. It admitted knowingly billing Medicare for portable oxygen contents for beneficiaries who did not use or require them, and billing regardless of whether the contents were delivered.

North Atlantic Medical Services and Unlicensed Staff

North Atlantic Medical Services agreed to a $852,378 settlement in December 2014 over allegations that unlicensed personnel provided respiratory care. Its whistleblower complaint alleged that liaisons set up equipment, initiated therapies, instructed patients and performed clinical oxygen evaluations. It also alleged that required respiratory-therapist follow-up visits did not happen.

The complaint alleged that the company substituted lower-paid unlicensed staff for licensed therapists. Here, the people doing the work were part of what made the bill questionable. A delivery record could show that equipment arrived while leaving the clinical service unexplained.

Continuing Billing After the Reason for Payment Ended

Lincare’s oxygen settlement concerned rent collected after the payment cap. Apria’s ventilator settlement concerned continued billing despite missed usage checks and information that patients had stopped using their devices. Those failures need different records to explain them.

Lincare and Oxygen Rent After the Cap

Lincare Holdings agreed to a $29 million settlement in August 2023. It admitted improperly billing Medicare, Medicare Advantage plans and beneficiaries for oxygen equipment rent and copayments after receiving three years of payments. Patients kept getting copay bills on rent the payment cap should have ended.

Lincare admitted that its controls for Medicare Advantage plans and beneficiaries were inadequate. Controls for traditional Medicare existed but were not always effective. It also admitted that employees raised concerns and officials at its regional billing office and corporate headquarters instructed them that the billing practices would continue.

The payment history was only half the story. The admission also identified a management decision to keep billing after employees questioned it. The settlement included independent claims and billing review at Lincare’s expense.

Apria and Ventilators Patients Had Stopped Using

Apria Healthcare agreed to a $40.5 million settlement in December 2020, with factual admissions about continued use, device selection and copay waivers. It relied on respiratory therapists to monitor ventilator use, but admitted that regular visits often did not happen. Apria kept seeking monthly payments. Even when visits showed that patients had stopped using their ventilators, the company often did not stop billing or determine whether the rentals remained medically necessary.

Apria also admitted encouraging sales staff to urge physicians to order Astral ventilators in PAC mode, frequently without telling them that a less expensive VPAP device could provide that therapy. It admitted offering copay waivers to persuade patients to choose Apria and granting full waivers without assessing whether patients could afford part of the payment.

Three former employees brought the case. The settlement’s compliance agreement required board oversight and independent claims review. The admitted failures connected sales decisions, clinical follow-up and billing inside the same business.

Lincare’s Separate Ventilator Settlement

Lincare’s separate February 2024 settlement totaled $25.5 million and concerned non-invasive ventilator rentals. In the settlement, Lincare admitted that clinical staff frequently missed the home visits its policy required every 60 days. It also admitted having cloud-based systems that could remotely monitor use of certain newer ventilators, but not using them to confirm that patients were using the devices as directed.

Lincare admitted that in some instances it kept seeking monthly payments when it knew patients were not using the devices.

What Does a CPAP Resupply Program Do?

A CPAP resupply program contacts existing patients about replacement masks and other supplies. For the allegations about manufacturers paying suppliers’ outreach costs, see our page on manufacturer benefits to respiratory suppliers.

What Evidence Is Needed to Report Medicare Fraud?

Respiratory insiders may hold the treatment records, delivery history and billing instructions that explain what the patient received, what the supplier billed and who made those decisions. The cases put specific records together: the treatment and device code at AdaptHealth, delivery and oxygen claims at Rotech, staff qualifications and visits at North Atlantic Medical Services, and rental history and internal concerns at Lincare.

Apria adds another comparison: what therapists learned about patient use and what billing did with that information. Manufacturer cases add service agreements, sales communications and product-selection records. A respiratory therapist, delivery employee, biller or sales insider may know the part of the business that makes the other records intelligible.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Speak to one of our whistleblower experts about the recurring claims you’ve seen.

When the Patient’s Care and the Bill Tell Different Stories

If you know how respiratory orders, home visits or monthly claims actually worked inside the business, speak to one of our whistleblower experts. We work with you to build your strongest respiratory equipment whistleblower case, bring in healthcare fraud whistleblower lawyers who understand respiratory suppliers, and stay beside you through the decisions ahead.