A former sales rep for a California company that provides oxygen tanks to people with breathing problems was awarded $1.8 million Tuesday when the company settled allegations that it paid illegal kickbacks.
Manuel Alcaine alleged in a qui tam complaint under the whistleblower provisions of the False Claims Act that Pacific Pulmonary Services submitted improper claims to federal health care programs.
The company agreed to pay $11.4 million to resolve the allegations.
The whistleblower lawsuit alleged that Pacific Pulmonary Services had an illegal cross-referral kickback scheme with sleep clinics.
Alcaine filed the lawsuit against Pacific Pulmonary Services in federal court in San Francisco, California.
The False Claims Act permits private individuals to sue on behalf of the government for false claims and to share in any recovery.
The government can intervene and take over FCA whistleblower lawsuits, as it did in this case.
The DOJ alleged that starting in 2006, some of the company’s patient care coordinators allegedly agreed to make patient referrals to sleep testing clinics in exchange for those clinics’ agreement to refer patients to Pacific Pulmonary Services for sleep therapy equipment.
The government said the arrangement violated the Anti-Kickback Act. That law prohibits “offering, paying, soliciting or receiving remuneration to induce referrals” for services and equipment covered by Medicare, Medicaid or other federally funded programs.
The complaint also alleged that from 2004, Pacific Pulmonary Services began submitting claims to the Medicare, TRICARE and Federal Employee Health Benefits programs for home oxygen and oxygen equipment without obtaining a physician authorization, as required by program rules.
The DOJ said the claims resolved by the settlement were allegations only and there has been no determination of liability.
The case was United States ex rel. Alcaine v. Braden Partners, L.P., dba Pacific Pulmonary Services, et al., Case No. 10-cv-4597 (N.D. Cal.).
Richard L. Cassin is the publisher and editor of the FCPA Blog.