FDAnews Device Daily Bulletin

Rotech Agrees to $2 Million Medicare Fraud Settlement

Aug. 27, 2008

Rotech Healthcare has paid $2 million to settle civil charges that it engaged in false or fraudulent conduct in billing Medicare for durable medical equipment.

The settlement resolves claims filed in April 2004 by former Rotech executive Sheila Bell-Messier of Texarkana, Texas, who alleged the company suppressed disclosure of billing issues in Texas, Colorado and Louisiana to avoid additional penalties related to a previous civil settlement in 2002.

According to allegations in Bell-Messier’s unsealed qui tam action in the U.S. District Court for the Eastern District of Texas, when Bell-Messier noticed that billing records were not in compliance with her understanding of federal directives, she “shut down the billing.”

For her part in the whistle-blower suit, Ms. Bell-Messier will receive 27 percent, or $540,000.