Apria catches break, Lincare boosts liquidity
LAKE FOREST, Calif. - The U.S. Court of Appeals, Seventh District, dismissed a whistleblower lawsuit last week that accused Apria Healthcare of inappropriately billing Medicare and Medicaid for home medical equipment.
Christine Chovanec's lawsuit accused Apria of billing for unnecessary equipment and "miscoding" or "upcoding" at its Morton Grove, Ill., branch from 2002 to 2004.
The court dismissed the lawsuit, however, because, when it was filed, there were two other whistleblower lawsuits pending that made the same accusations. (Those lawsuits were settled in 2005 for $17.6 million.) It stated in its decision: "When a person brings an action under this subsection, no person other than the government may intervene or bring a related action based on the facts underling the pending action."
"This person said, 'My stuff is different' and the court said, 'No, it's not,'" said Neil Caesar, president of the Health Law Center in Greenville, S.C. "The fact that it was a different place and different years didn't matter. The court concluded that, if anything, this was part of an alleged national effort."
For Apria, that's the good news.
The potentially bad news: The lawsuit opens the door for a government agency, like the Department of Justice, to investigate Apria's billing practices in Illinois from 2002 and 2004, says Jeff Baird, a healthcare attorney with Brown & Fortunato in Amarillo, Texas.
Additionally, Chovanec could refile her lawsuit if she can prove the alleged inappropriate billing wasn't the result of an alleged national effort, he said.
"Let's assume the alleged fraudulent activity from the 1990s came to a screeching halt after those two lawsuits were settled," Baird said. "If, however, a rogue manager in Illinois was doing his or her own thing, then that would be different."
Lincare boosts trading volume, liquidity
CLEARWATER, Fla. - Lincare's board of directors declared a three-for-two stock split May 14.
The stock split will take the form of a 50% dividend that will be distributed on June 15, 2010, to shareholders of record on June 3, 2010, according to a release.
"We believe this is a good opportunity to increase the trading volume and liquidity of our common shares," stated CEO John Byrnes.
The Web site Investopedia.com has this to say about stock splits:
A corporate action in which a company's existing shares are divided into multiple shares. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because no real value has been added as a result of the split.
For example, in a 2-for-1 split, each stockholder receives an additional share for each share he or she holds. One reason as to why stock splits are performed is that a company's share prices have grown so high that to many investors, the shares are too expensive to buy in round lots.
At press time on Friday, Lincare's stock was trading at $45.21 per share.
Lincare will not issue fractional shares in connection with the stock split, according to the release. Any resulting fractional shares will be paid in cash based on the closing price of the common stock on June 3, 2010.