Fraud & Abuse

Rotech Uncovers Contractor Fraud: An independent contractor hired by Orlando, Fla.-based Rotech Healthcare fabricated documentation for nonexistent sales of bulk medical equipment to the U.S. Department of Veterans Affairs, according to Rotech officials. However, the VA apparently was not fraudulently billed as a result and none of the fabricated sales to the VA were consummated. Rotech reported the falsified sales as approximately $30 million in revenue, most of which the company recorded in 2001. The company is reviewing another $6 million in unreserved receivables on VA non-bulk contracts and has brought the matter to the attention of government authorities. Additionally, Rotech has terminated the independent contractor in question, has retained a law firm and a government contracts consulting firm to conduct an internal investigation, and is working with its accounting firm to determine how to treat the recorded revenue.

Financials

Apria Reports Q2 Earnings: For the second quarter ended June 30, 2002, Apria Healthcare, Lake Forest, Ill., reported a net income of $26.2 million, or 47 cents per share, an increase of 38 percent compared to a net income of $18.8 million, or 34 cents per share, for the same quarter in 2001. Sales for the quarter totaled $310.4 million, a 9.5 percent increase compared to sales of $283.5 million during the same quarter in 2001.

Alliances

O2 Science and Nevada Respiratory Forge Joint Venture: Expanding its presence in the Las Vegas area, regional respiratory care provider O2 Science, based in Tempe, Ariz., has forged a joint venture with Las Vegas-based Nevada Respiratory, the companies announced last month. Although the joint venture will operate at a new location — 3107 W. Post Rd., Las Vegas — the business will retain the name Nevada Respiratory, O2 Science explained.

Noteworthy

VITAS Healthcare Opens HME Company: VITAS Healthcare, Miami, one of the nation's largest hospice care providers, has opened a home medical equipment company to serve its Chicago-area patients, VITAS announced. By handling patients' home medical equipment needs in-house, “we are able to reduce our costs by half,” said Mark Bowers, VITAS' general manager of HME. Because the hospice and the HME dealer are one company, “we can really focus on the hospice industry … which requires a very heavy turnover of equipment.” VITAS also operates HME companies in Florida and Texas.

Gentiva Settles Age-Discrimination Suit: Melville, N.Y.-based Gentiva Health Services in July reached a settlement agreement in a 4-year-old age-discrimination lawsuit. Terms of the settlement in the case of Fredrickson v. Olsten Health Services Corp. and Olsten Corporation were not disclosed. “I am pleased to advise that the terms of the settlement do not change the cash guidance previously provided,” said Ron Malone, chairman and chief executive officer of Gentiva. “The settlement enables us to release the cash previously restricted in support of a supersedeas bond, and also to eliminate future litigation costs associated with this matter.”

People & Places

Legal Consultant to Leave Home Care Industry: Michael DeCarlo has resigned his position as counsel for the Washington-based law firm Dickstein Shapiro Morin & Oshinsky, and has accepted a position as director and counsel for policy development for the Health Insurance Association of America, beginning July 15. DeCarlo was a co-founder of Dickstein Shapiro's Health Law Services group, and prior to joining the firm, was Of Counsel to Parver & Associates, a health care law and consulting firm. From 1991 to 1996, DeCarlo served as director of regulatory affairs for NAMES, now the American Association for Homecare. He also has served as in-house attorney for the American Health Care Association and as research director for the Alabama Nursing Home Association.

Praxair Makes Executive Staff Changes: Praxair, Danbury, Conn., has named Sally Savoia vice president of human resources. Savoia was vice president of healthcare and president of Praxair Healthcare Services, a Praxair subsidiary. George Ristevski, former vice president and controller, succeeds Savoia in her healthcare positions. Patrick Clark has joined the company as vice president and controller. Clark previously was chief financial officer of Enodis North America.

Bell to Lead Vital Care Operations: Meridian, Miss.-based Vital Care has named Chuck Bell its chief executive officer and chief operations officer. Bell is the former owner of two Vital Care franchises in Mississippi and Florida.

Consultant Enters Home Care Market: Craig Jeffries has established Strategic Consulting, a company that will provide business planning, strategic planning, operational and financial services to U.S. home care businesses. For more information, contact the Johnson City, Tenn.-based company at (423) 282-9712.

For breaking news, go to www.homecaremonday.com, the electronic news service of the home medical equipment industry.