Several States Work Together, Reach $40 Million Settlement with Apria Healthcare

On January 20, 2021, Florida Attorney General Ashley Moody announced a $40 million settlement between the state’s Medicaid Fraud Control Unit (MFCU), the United States Department of Justice, and other state MFCUs against April Healthcare Group Inc. and Apria Healthcare LLC.

The federal-state investigation arose out of a qui tam suit filed in the United States District Court for the Southern District of New York in 2017. Relators Benjamin Martinez, Jr., Connie Morgan, and Christopher Negrete alleged that Apria violated the federal False Claims Act and various state false claims statutes by submitting false claims to state Medicaid programs to seek reimbursement for non-invasive ventilator (NIV) rentals that Medicaid beneficiaries either did not use or medical professionals deemed not medically necessary from January 1, 2014 to December 31, 2019.

The investigation also found that routine physician visits to confirm individuals were following correct NIV procedures were not often maintained, and in December 2016, more than half were not completed. In 2017, an Apria executive informed a member of Apria’s executive leadership that the NIV clinical team believed a “meaningful proportion” of the home visits that should have been happening as part of Apria’s “baseline clinical policy” were not being done.

Even when Apria did receive information from an in-home respiratory therapist visit that the patient had stopped using their NIV, Apria often did not take steps to stop the payments from the state Medicaid programs, or attempt to determine if the NIV rentals were still medically necessary.

In addition, Apria offered several different types of rental respiratory assistive devices, of which the NIV was the highest level. At the level below, patients could use the VPAP S9 (VPAP RAD), which offered a bi-level pressure support setting called PAC mode, also found on the NIV. In 2015, Apria encouraged sales staff to pressure physicians to order the NIV machines and prescribe their use in PAC mode – hiding the fac that the VPAP RAD could also offer PAC mode therapy to patients at a lower monthly cost. This often resulted in Apria renting out the more expensive NIVs when the lower cost VPAP RAD may have met the patients’ medical needs.

After analyzing the fraudulent behavior, it was concluded by both the federal and state governments that Apria had failed its duty to correctly and accurately report NIV usage and in turn violated the Federal False Claims Act, along with numerous state anti-fraud statutes.

According to the terms of the settlement, Apria will pay a total of $40 million, of which $4,812,000 will go toward reimbursing state Medicaid programs. Additionally, Apria admitted to all of the allegations outlined in the settlement.

Florida Attorney General Ashley Moody said, “We will not allow bad actors to falsify forms or blatantly bill Florida taxpayers for services never rendered or not medically necessary. I am proud of the role my Medicaid Fraud Control Unit played in investigating this multimillion-dollar fraudulent billing scheme inflicted on taxpayers in Florida and across our country, and the recovery of more than $40 million.”

California Attorney General Xavier Becerra also released a statement regarding the settlement, “When a healthcare company gets lazy and neglects its duty to stay within the bounds of the law, its actions can pose a threat to the health and wellbeing of those who rely on their products and services,” said Attorney General Becerra.  “It is up to us, working with our state and federal partners, to keep violations like those alleged against Apria in check. This settlement will return the money where it belongs: to help communities in need.”