Apria to Pay $17.6 Million to Settle Billing Charges

LAKE FOREST, Calif.–Apria Healthcare has reached a preliminary
agreement with the government and whistleblowers to pay $17.6
million, without admitting any wrongdoing, to settle allegations of
Medicare overbillings.

The settlement involves two civil lawsuits that alleged the
company submitted incomplete or inaccurate documentation to
Medicare from mid-1995 through 1998. Throughout the litigation,
which began more than seven years ago, Apria has said that “errors
and omissions” may have been made but maintained the amount and
significance of the deficiencies was overstated. In 2001, the
government said the company owed $103 million in overpayments,
which officials estimated with penalties could have turned into a
total liability between $4.8 billion to $9 billion.

With legal fees and other costs, the tentative settlement will
reach $20 million, which will appear on financial statements for
the quarter ending June 30, according to a company statement. It
could take several months to reach a final agreement.

“We are pleased that we have been able to reach an acceptable
compromise with the government concerning our billing documentation
and record-keeping during the period following the merger that
created Apria 10 years ago,” company CEO Lawrence M. Higby said in
the statement.

“Apria has further enhanced its industry-leading commitment to
compliance with applicable laws and regulations by increasing the
resources we commit to our formal compliance programs,” he
continued. “This includes extensive training, internal audits and
other steps taken to ensure that our compliance program meets the
expectations of our patients, customers, auditors and government
officials. As a result, we believe that our compliance program
today is the best in the industry.”

In June, the $1.5-billion provider announced it was for sale and
had called in investment banker Morgan Stanley to consider possible
offers. The company operates more than 500 branches in 50
states.