Lincare ponies up $10 million to settle OIG kickback charges

Friday, June 30, 2006

CLEARWATER, Fla. - Lincare surprised few industry attorneys in mid-May when the company opted to pay $10 million to settle charges that it allegedly gave kickbacks like sports tickets and fishing trips to physicians in exchange for referrals.
Why? The alternative would have been the uncertainty of going to court and risking astronomical monetary judgments, suspended reimbursement and even mandatory exclusion from the Medicare program, industry attorneys said.
"No matter how good the target company's facts are, it is a roll of the dice to challenge the U.S. government in court, because a judge or jury could determine, given the breadth of the healthcare statutes, that there is a violation somewhere," said Jeff Baird, a healthcare attorney with Brown & Fortunato in Amarillo, Texas. "Public companies, especially, reach a settlement they can afford and avoid uncertainty. Stockholders can handle bad news, but they can't handle uncertainty."
The Office of Inspector General (OIG) declared the civil monetary settlement its largest ever. The settlement also includes a five-year corporate integrity agreement.
Lincare did not admit any wrongdoing. The company stated in a release that, in all, it had paid about $12 million to settle investigations in Florida, Massachusetts, Tennessee and Idaho from January 1993 through December 2000.
While Lincare did not admit any wrongdoing, providers should "sit up and take notice" of the settlements. The OIG and other government agencies like the Department of Justice, which have limited budgets, like to make examples of high profile companies, industry attorneys said.
"This case was meant to send a message to the industry that the OIG is willing to go after big targets and big money," said Ann Berriman, a private practice healthcare attorney in Baltimore.
Elizabeth Hogue, a private practice healthcare attorney in Burtonville, Md., agreed: "This settlement says (kickbacks) are now a hot ticket for the OIG. Providers need to pull out their agreements with medical directors and review them to make sure they comply with anti-kickback and Stark laws."