Liberty settles with CMS

Tuesday, October 28, 2014

PORT ST. LUCIE, Fla. – Liberty Medical Supply has agreed to settle a $160 million claim with Medicare, according to news reports.

The agreement, reached Friday, means Liberty will pay CMS nearly $32 million, according to an article on Law360.

The agreement should make it easier for Liberty, which filed for Chapter 11 bankruptcy in February 2013, to position its assets for sale to a third party buyer.

In February of this year, bankruptcy judge Peter Walsh disallowed several whistleblower claims, which were filed in 2008. Walsh ruled that two former employees could not substantiate claims that the provider received millions of overpayments from Medicare and Medicaid and covered it up by tampering with data.

Earlier this month, Liberty sought approval of a stalking horse bid consisting of $13 million in cash and assumed liabilities of $33.5 million. It would include most of the company’s assets expect LMSP Pharmacy, its home delivery pharmacy business, which it intends to sell separately.

In September, Liberty notified 58 employees at its call center here that they could be laid in late November. There are currently about 500 employees working at its corporate headquarters, down from the 2,400 it had two years ago, according to local news reports.