Apria Healthcare Group, Costa Mesa, Calif., said last week that government and plaintiffs' attorneys estimate that a whistleblower lawsuit over its billing practices could result in penalties of $4.8 billion to $9 billion, but the company believes the estimates are wildly overstated.
In a securities filing, the provider of home respiratory and infusion therapies revealed that the U.S. attorney's office in Los Angeles and lawyers for the whistleblowers estimated the company overbilled the federal government by $103 million from mid-1995 through 1998 and submitted 900,000 false claims. The liability estimates assume Apria would be subject to triple damages and fines of $5,000 to $10,000 per false claim under the False Claims Act.
Apria said the sampling of 300 patient files with a total of 2,300 claims, which led to the liability estimates, and the extrapolation methods used "are statistically flawed and legally problematic." The firm says it is innocent of fraud but said clerical errors may have been made in its claims.
Also last week, Apria reported a 22% increase in net income for the second quarter ended June 30 to $17.2 million, or 31 cents per share, from $14.1 million, or 26 cents per share, in the year-ago quarter. Revenue rose 12.2% to $283.5 million.