In brief: Tax evaders, earnings reports and Apria

Sunday, November 18, 2007

GAO: Some Medicaid providers evade taxes
WASHINGTON - The Government Accountability Office (GAO) released a report last week that shows doctors and other Medicaid providers owe billions in unpaid taxes.

The GAO found that more than 30,000 Medicaid providers, about 5% of those paid in fiscal 2006, had more than $1 billion in unpaid federal taxes. Medicare providers had another $1 billion. The report cites examples of those providers using the savings to subsidize multi-million-dollar homes and fancy cars and boats. It also cites patient abuse and other violations.

While the GAO report doesn't name home medical equipment providers, specifically, it cites violators in the homecare and home health services fields.

Of the findings, Sen. Norm Coleman, R-Minn., told USA Today: "These doctors are supposed to be serving the most needy. Instead, they are cheating taxpayers in order to line their pockets. These are not your everyday tax cheats. These are healthcare providers that receive billions from Medicaid every year."

The GAO has been investigating federal tax abuse since 2003. This is the fifth report that the agency has forwarded to the Senate's Permanent Subcommittee on Investigations.

American HomePatient, Arcadia report earnings
BRENTWOOD, Tenn. - American HomePatient reported last week revenues of $71.3 million for the third quarter of 2007 compared to $80.4 million for the same period last year, a decrease of 11.3%. Net income was $100,000 for the quarter compared to a net loss of $100,000 last year.

For the nine months ended Sept. 30, 2007, American HomePatient reported revenues of $221.6 million for the third quarter of 2007 compared to $238.7 million for the same period last year, a decrease of 7.2%. Net loss was $5.2 million for the quarter compared to a net loss of $4 million

A significant portion of American HomePatient's drop in revenues was due to underperforming non-focus products lines like durable medical equipment and infusion therapy. The provider also blamed initiatives implemented to improve operations and patient co-pay collections, and to provide appropriate service levels to patients.

INDIANAPOLIS - Arcadia Resources reported Nov. 9 revenues of $38.7 million for fiscal second quarter 2008 compared to $38.3 million for the same period last year. Net loss was $4.5 million for the quarter compared to a net loss of $1.6 million last year.

For the first half of fiscal 2008, Arcadia reported revenues of $77.9 million and a net loss of $8.4 million.

Revenue from durable medical equipment was "essentially unchanged" from the year-ago quarter. Much of Arcadia's revenue growth was due to its in-home health services segment, which comprises about 81% of total net revenues.

During the second quarter, Arcadia "disposed" of certain DME operations.

"While we are never satisfied to report a loss, we are proud of the first half of fiscal 2008 in terms of our turnaround efforts and the building of a 'new' Arcadia HealthCare," stated Marvin Richardson, president and CEO in a release.

Apria nixes debt offering
LAKE FOREST, Calif. - Apria last week withdrew the sale of $265 million of senior subordinated notes due to "adverse" market conditions. The provider planned to use proceeds from the offering to bankroll its acquisition of Coram. Apria will now draw on its $500 million line of credit to close the $350-million acquisition.

Feds foil fraudulent family
MIAMI - Four members of the same family were each sentenced to 57 months in prison for Medicare fraud Nov. 8.

Carlos Berenguer, 61, Ivan Aguera, 34, Aristides Berenguer, 64, and Robert Berenguer, 58, were sentenced by U.S. District Judge Jose Martinez in Miami. Judge Martinez also ordered each of the four defendants to pay over $1.4 million in restitution for the money they received in false claims billed from 2001 to 2003. All four defendants pleaded guilty to all counts in March 2007.

The defendants owned several companies among them: Select Medical Equipment, Professional Medical Equipment and Palm Medical Equipment.
Through the companies the four recruited and paid Medicare beneficiaries to take part in scams that included falsely billing Medicare for unnecessary concentrators and compounded respiratory medications.

In 2006, the Medicare program paid for over $155 million worth of aerosol medications in Miami-Dade County, making it the single most common item billed to Medicare Part B. From 2005 to 2006, claims for these aerosol medications increased over 100 percent. In addition, according to Medicare data, Miami-Dade County alone accounted for more paid DME claims than every state in the country except California, Texas, New York, Michigan and Ohio.