Lincare Settles with OIG, Pays $10 Million

Lincare Holdings Inc., based in Clearwater, Florida, and its subsidiary Lincare Inc. have entered into a Settlement Agreement and Corporate Integrity Agreement (CIA) with the Office of Inspector General (OIG) of the US Department of Health & Human Services (HHS), under which Lincare paid $10 million and entered into a five-year companywide CIA, OIG announced May 15.

"[The settlement] is the largest ever for OIG under its civil monetary penalty authorities," said the OIG. Lincare is one of the national's largest durable medical equipment (DME) suppliers, specializing in oxygen and other respiratory therapy services.

The settlement resolves allegations that Lincare paid illegal kickbacks and violated the Physician Self-Referral (Stark) Law. It has been noted that the settlement could have implications for other companies providing DME.

OIG alleged that Lincare engaged in a nationwide scheme to pay physicians kickbacks to refer their patients to Lincare. OIG alleged that Lincare gave referring physicians items such as sporting and entertainment tickets, gift certificates, rounds of golf, golf equipment, fishing trips, meals, advertising expenses, office equipment, and medical equipment. "The illegal kickbacks also came disguised as payments pursuant to purported consulting agreements, such as Medical Director Agreements," said OIG, which also alleged that Lincare violated the Stark Law by accepting referrals from parties to the illegal consulting agreements.

"This significant settlement is an important example of OIG's continuing effort to eliminate illegal kickback practices and violations of the Self-Referral Law," said Inspector General Daniel R. Levinson. "OIG will continue to pursue aggressively those who undermine the integrity of the Medicare program."

Lincare did not admit to any wrongdoing, according to a news story from Reuters May 15.

Under the Civil Monetary Penalties Law, OIG may impose a penalty of up to $50,000 per illegal kickback and damages of up to three times the amount of the kickback. Under the Stark Law, OIG may impose a penalty for $15,000 for each item or service that was billed to a federal healthcare program pursuant to a prohibited referral as well as an assessment of up to three times the amount claimed. Under both the anti-kickback and self-referral provisions, OIG may exclude a provider for violations.