National medical equipment provider, Rotech Healthcare Inc., has paid $2 million to settle civil charges that it engaged in false or fraudulent conduct in billing Medicare for durable medical equipment.
According to Berg & Androphy, a Houston law firm who represented the former executive of the company who filed the whistleblower claims, the company allegedly suppressed disclosure of billing issues in Texas, Colorado, and Louisiana in order to avoid additional penalties related to a previous civil settlement.
In 2002, while in bankruptcy, Rotech settled federal civil claims related to billing issues related to its Montana, Kentucky, Florida, and Georgia operations.
Former Rotech executive Sheila Bell-Messier, of Texarkana, Texas, whose company had been purchased by Rotech in 1995, filed the whistleblower claims in April 2004. She had overseen operations in 12 states.
According to Bell-Messier, she noticed that billing records were not in compliance with her understanding of federal directives, so she "shut down the billing." Despite requests to restart the billing, she refused, and according to the federal complaint, said she "was not going to Medicare prison for Rotech."
The company, which is headquartered in Orlando, Fla., denies any wrongdoing.
Under the terms of the settlement $2 million will go to the federal government with Bell-Messier receiving 27 percent or $540,000.
Rotech also has agreed to pay legal fees of $1.2 million to Bell-Messier's legal team.
According to Joel Androphy, the negotiated settlement amount was a reflection of Rotech's stock price of 34 cents per share at the time of settlement, down from $21 in early 2004 when Bell-Messier filed suit.