6 Companies Settle Federal Medicare Fraud Suit

NEWPORT BEACH — A home oxygen equipment franchiser and five others agreed to pay $5 million to settle a federal lawsuit accusing them of fraud for allegedly submitting false claims to Medicare, the Justice Department said Wednesday.

Home Americair of California was accused last year of using unlawful billing practices to seek Medicare refunds and falsifying patients’ test results.

The lawsuit also alleged that the company trained its franchisees to cheat the government by improperly seeking oxygen therapy for Medicare patients and by signing medical approvals that physicians should have authorized, the agency said.

As part of the settlement, Home Americair, which operates more than 30 home oxygen equipment franchises nationwide, will implement a “corporate integrity program” that sets forth safeguards to prevent future billing problems, the agency said.

Home Americair could not be reached for comment.

The allegations were initially made by a former owner and two former employees of franchises in Kentucky and Pennsylvania. The agency joined in the lawsuit.

The lawsuit also alleged that the company tried to increase the number of patients who were eligible for home oxygen therapy by telling franchisees to lower patients’ blood oxygen by having patients exercise, testing them while they slept, by pricking a patient’s finger or squeezing a hand.

Also agreeing to the settlement were Home Americair Inc., the billing company; Thomas E. Frank, owner of Home Americair of California; franchises Florida Homecair Inc. of Melbourne, Fla., and Bates East Corp. of King of Prussia, Pa., and Cynthia M. Bates, an owner of Bates East, the agency said.

In another lawsuit filed against the company in Orange County Superior Court, eight former franchisees have alleged that the company encouraged them to violate Medicare laws. That lawsuit is pending.