Fed Charges Americair with Fraud (full article)

[Dave Walsh RRT]

Fellow Forum Members:

I asked the author below to grant permission for reprint. Those who have=
had
experiences with the corporation named may want to contact Eli Research
directly for any followup.

>Dear David,

Here's the article on Americair you asked for, which was published in
the September 1 issue of Eli's Home Health Care Report, our biweekly
home health/HME newsletter. Feel free to call or e-mail if you want
more information on this case or other compliance issues. Thanks for
your interest!

Hilary Arnold, JD, MPH
Senior Editor
Eli Research

Fraud & Abuse
Americair Encouraged Falsification Of Oxygen Tests To Sign Up More
Patients, Former Franchisees Claim

A whistleblower suit accusing Newport Beach, CA-based oxygen
franchisor Home Americair of California, Inc. of encouraging
franchisees to falsify the results of patients' lab tests and using
unlawful billing practices is slowly moving towards trial as former
franchisees seek to break free of Americair's network.
The Department of Justice has joined a qui tam, or whistleblower,
suit against Home Americair under the False Claims Act, which is now
pending in federal district court in Los Angeles. Assistant U.S.
Attorney David Ringnell tells Eli that the trial is scheduled for
April 1998 and is expected to last about a month.
Under the False Claims Act, a private whistleblower may file suit=
on
behalf of the government and may receive a share of any recovery.
Penalties for violating the False Claims Act include treble damages
for each claim plus fines of $5,000 to $10,000 per claim, so companies
found liable for making false claims can easily face millions of
dollars in fines.
The government is charging that the home oxygen company trained i=
ts
franchisees to defraud the Medicare system by signing certificates of
medical necessity without physician authorization and manipulating the
results of oximetry tests so that patients would appear to have lower
blood oxygen levels, thereby enabling more beneficiaries to qualify
for the benefit.
The suit also names as defendants Thomas Frank, Americair's found=
er,
president, and principal owner, as well as franchise operators Home
Care of Florida, Inc. in Melbourne, FL and P-M of Kentucky, Inc. in
Louisville, KY.
Whistleblower plaintiffs Terry Frisco, a former franchise operato=
r in
Louisville, KY, and Darrell Jones, a former Americair employee,
originally filed suit alleging that Home Americair processed and
submitted false claims for Medicare reimbursement on behalf of
patients whose blood oxygen levels were not actually low enough to
qualify them for the benefit.
The plaintiffs allege that Americair and certain of its franchise=
es
collude with clinical labs to "manipulate or falsify the results of
oximetry tests to make it appear that patients register an arterial
blood saturation of 88 percent or less while at rest -- and therefore
are qualified for full Medicare reimbursement -- when, in fact, they
do not."
In its response to the lawsuit, Home Americair denies manipulatin=
g
the outcome of any oximetry tests and the plaintiffs' other
allegations. Americair's attorney in the qui tam suit, George
O'Connell of Stevens & O'Connell in Sacramento, did not respond to
calls.

Exercising Patients To Lower Their Oxygen Levels

In particular, the plaintiffs charge that Americair manipulated
oximetry tests by exercising the patients before administering the
tests to drive down the level of oxygen in the patient's blood, and
then falsely indicating on the 484 form that the test was conducted
while the patient was at rest.
Another method used by the defendants to make the patient appear =
to
need oxygen therapy was to manipulate the readings taken by the
testing device itself, the plaintiffs charge. "The oximetry testing
device will give lower readings if the patient's hand is waved
continuously, if the probe is pinched, if the head is nodded with the
ear probe on, or if the ear probe is placed on the patient's finger,"
the lawsuit notes.
"A third, and perhaps most common way, of manipulated the test
results used by defendants is to administer the test nocturnally, but
to report on the form 484 that the test was conducted 'at rest' rather
than 'sleeping,'" the suit claims. However, form 484 specifically asks
whether the test was conducted while the patient was asleep, and if so
the patient qualifies only for nocturnal use of oxygen, which is
reimbursed at a significantly lower rate, the plaintiffs note.
The plaintiffs also maintain that Americair encouraged franchisee=
s to
pressure their marketers to sign up as many patients as possible for
oxygen therapy by offering financial incentives and threatening
termination.
A former sales representative for an Americair franchise in Chica=
go,
Robert Millican, tells Eli that the company paid its marketers
"ridiculously low" commissions for each Medicare patient who was
signed up to receive oxygen, and consequently turnover was unusually
high. Moreover, Americair seemed to have a policy of hiring recent
college graduates with little knowledge of Medicare reimbursement
rules whose job was simply to sell physicians on the idea of home
oxygen for any of their patients who might be short of breath,
regardless of whether it was medically necessary, Millican adds.
According to the plaintiffs, "the success of this scheme" depende=
d on
Americair's ability to find laboratories which are willing to provide
the desired test results or ignore Medicare's requirement for
independent testing to qualify patients for home oxygen. Similarly,
Millican tells Eli that while he was working for Americair, he
happened to notice that the lab that was supposedly running tests for
the Chicago franchise was in his neighborhood, but when he went to
that address, it turned out to be nothing but a rented mailbox in an
office supply store.
The plaintiffs also allege that Home Americair and many of its
franchisees routinely ignore the rule that a physician or a member of
the physician's staff, not a DME company employee, complete the 484
forms. "In some cases, the physician submits blank, signed forms to
the oxygen supplier, and the supplier takes care of the rest," the
plaintiffs say.
Moreover, Home Americair "actively encourages its franchisees" to
manipulate the results of oxygen tests to qualify more patients for
home oxygen, the plaintiffs claim. For example, when Frisco and asked
a Home Americair employee, Nancy Roberts, what to write on the 484 for
patients who had been tested nocturnally, she told him that "the only
way they would get paid by Medicare was if the test was conducted at
rest," adding "isn't a person 'at rest' when he is sleeping?"
Frisco also claims that Frank himself once called to urge Frisco =
to
place the qualifying oxygen saturation value in the "at rest" box on
the 484, even for patients who only had low oxygen levels while
sleeping.

"Working With The Lab" To Obtain The "Right Diagnosis"

In addition, Frisco maintains that at billing seminars for
franchisees, other Americair owners, general managers, and sales
managers "openly discussed the ways they could set up almost anyone
with the 'right diagnosis.' Among the methods discussed were
'manipulating the probe' or 'working with the lab.'"
Similarly, the plaintiffs allege that another franchise owner, Ci=
ndy
Justice from Melbourne, FL, "visited the Friscos at the direction of
Tom Frank" to recommend the following:
=80 "that for all qualifying nocturnal saturations, the Friscos
indicate on the 484 forms that the tests had been conducted 'at
rest;'"
=80 "that they never allow the respiratory therapist to have dire=
ct
contact with the treating physician;"
=80 "that they take all of their lab reports and patient progress
reports out of the individual patients' files;"
=80 "that they fire any therapist who requested the arterial bloo=
d gas
test (even though this test is the only medically appropriate test for
certain patients, i.e., those exhibiting signs of retaining carbon
dioxide);"
=80 "that they ask for portable oxygen tanks (to get additional
Medicare reimbursement) and then switch them out every month to
indicate usage, regardless of whether they actually had been used;"
and
=80 "that they ask doctors to sign blank 484 forms so that the Fr=
iscos
could fill them out 'correctly' following an oxygen set-up." <

[bobmcd...@gmail.com]

I'm really shocked by these allegations. As a former paramedic, I was recruited by Americair of Sacramento to come and work for them as a respirator tech. I worked out of their Vacaville, CA office.

I was NEVER asked to do anything under-handed as far as manipulating any test results. Everything was done with the utmost level of integrity. After about a year in this position, I was promoted to General Manager and opened a new franchise in Las Vegas, NV.

Again, everything was done with integrity. We never did the initial qualifications, but we did perform objective & subjective follow-up assessments as well as oximetry testing. Again, everything was well above-board during my tenure with Americair.

As for billing practices, all billing was conducted at the Corporate office in Newport Beach, and franchise owners had nothing whatsoever to do with this aspect of the business.

So....a very interesting article. I left Americair in December 1994.