Apria Concedes Errors in Support Documents for Medicare Billing
Apria Healthcare Group Inc., under investigation by the U.S. attorney’s office in Sacramento, said it is having trouble producing documents that justify its billing in federal health-care programs.
In a report filed this week with the Securities and Exchange Commission, the Costa Mesa home health-care giant said it discovered “errors” and “deficiencies” in supporting documents for billings to Medicare, Medicaid and other programs.
As a result, the struggling company could face criminal or civil penalties that might affect its bottom line, according to the report.
The company said any criminal charges or civil claims would be unwarranted. The mistakes or omissions in the documents were the result of human error, Robert Holcombe, the company’s general counsel, said in a telephone interview.
Federal officials said they would not comment on an ongoing investigation.
On July 8, Apria disclosed that it had received six subpoenas from the U.S. attorney’s office seeking documents related to billing practices over the last three years. Officials sought documents from its corporate headquarters and offices in Sacramento, San Diego and Canonsburg, Pa.
In its filing this week, the company acknowledged that on July 29, it received a subpoena for additional documents from the Sacramento office.
The latter subpoena sought a sampling of patient records, Holcombe said. Previously, the government had sought proof that physicians had ordered the company’s services, that patients had received what was ordered and that the company’s personnel were receiving adequate training, according to Apria.
Holcombe said Tuesday that the company is cooperating with investigators and has nearly completed handing over the requested documents.
If authorities conclude that the billing practices constituted criminal activity, or takes civil action, the amounts could be “highly material” to Apria’s financial condition, the company said in the filing. It noted that the amounts could include claims for treble damages.
It said it’s unaware of what claims or proceedings the government may be contemplating.
The investigation--a joint effort by the Department of Health and Human Services and the Department of Justice--comes at a difficult time for the loss-ridden company.
Revenue from federally funded health programs accounts for 39% of the company’s revenue.
In the third quarter, the company’s revenue slumped 28% to $219.4 million from $304.4 million for the same period last year, reflecting its move to shed unprofitable businesses.
The company also took a $160-million charge for the third quarter to clean up its financial books. Overall, it reported a third-quarter loss of $194.7 million, or $3.76 a share, compared with net income of $16.2 million, or 31 cents, a year ago.
