Attorney General Becerra Announces $40 Million Nationwide Settlement with Apria Healthcare

SACRAMENTO – California Attorney General Xavier Becerra today announced a $40 million nationwide settlement with Apria Healthcare Group, Inc. and Apria Healthcare LLC (together, Apria) resolving allegations that the respiratory services provider violated the Federal False Claims Act (FCA), along with numerous state anti-fraud laws by seeking Medicaid reimbursement for ventilation machines that were not medically necessary or reasonable. Of the $40 million nationwide settlement, $4,812,000 relates to violations of Medicaid laws. California’s share of the Medicaid-related settlement is $206,338.30.

“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.”

In February 2017, a civil action was filed against Apria in a New York District Court claiming the company sought reimbursements for non-invasive ventilators (NIVs) when it was medically unnecessary or unreasonable. Apria offers three categories of respiratory equipment, with each category performing more complex and costlier procedures than the last. NIVs are in the third tier, and therefore receive the highest and longest paid Medicare and Medicaid reimbursement rate due to their high maintenance. From January 1, 2014, to December 31, 2019, it was found that Apria aimed to increase profits by attempting to persuade healthcare providers to convert patients from the second category of respiratory devices to NIVs. Apria then billed for NIVs that were either not used by patients, were used inconsistently, or only performed the function of respiratory equipment in the first or second tier. Routine physician visits to confirm individuals were following correct NIV procedures were also neglected, and in 2017, half were not completed. After analyzing this 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 including the California False Claims Act.  

The settlement was negotiated by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA), working with a team of other states and the federal government. Through DMFEA, the Attorney General’s office works to protect Californians by investigating and prosecuting those who perpetuate fraud on the Medi-Cal program. DMFEA also investigates and prosecutes those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state. DMFEA regularly works with whistleblowers, the California Department of Health Care Services, and law enforcement agencies to investigate and prosecute cases.

A copy of the settlement agreement is available here.

The DMFEA receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $33,829,000 for Federal fiscal year 2019-20. The remaining 25 percent, totaling $11,379,000 for fiscal year 2019-20, is funded by the State of California. The Federal fiscal year is defined as October 1, 2019, through September 30, 2020.