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Company in Floyd County, Kentucky Agrees to Pay $200,000 to Resolve Allegations of Fraudulent Billing for Respiratory Devices

LEXINGTON, KY  According to the U.S. Attorney's Office, Eastern District of Kentucky: Oxygen Plus, Inc., a provider of durable medical equipment based in Floyd County, Kentucky, has agreed to pay $200,000 to resolve allegations that it violated the False Claims Act by fraudulently billing Medicare and Medicaid for respiratory devices that patients did not need or use, in contravention of those programs’ requirements.

Oxygen Plus provided non-invasive ventilators (“NIVs”) for home use to patients in Kentucky.  NIVs are a type of complex respiratory equipment designed to deliver pressurized air into the lungs of patients with serious respiratory diseases.  Medicare and Kentucky Medicaid pay a monthly reimbursement for a patient’s rental of an NIV, so long as the NIV is necessary and reasonable for the patient’s treatment.

Oxygen Plus entered into a settlement agreement with the United States and the Commonwealth of Kentucky to resolve a federal False Claims Act case.  According to the settlement agreement, the government alleged that between January 2017 and June 2021, Oxygen Plus submitted over 300 false claims to Medicare and Kentucky Medicaid by continuing to seek reimbursement for NIV rentals even after patients no longer needed the devices or were no longer using them.

The settlement resolves allegations brought in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act by two former employees of Oxygen Plus.  The qui tam provisions permit private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States, and to share in any recovery.  Here, the whistleblowers will receive $32,000 as their share of the settlement.

The government’s pursuit of this matter illustrates its emphasis on combating healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).

This settlement was the result of a coordinated effort by the U.S. Attorney’s Office’s Affirmative Civil Enforcement section and the U.S. Department of Health and Human Services, Office of Inspector General.  Assistant U.S. Attorney Christine Corndorf represented the government.

The lawsuit is captioned United States ex rel. Sparkman v. Oxygen Plus, Inc., et al., No. 3:21-CV-22 (E.D. Ky.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

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