Legal action: Lincare, InfuSystem

 - 
Wednesday, November 23, 2016

MIAMI – The plaintiffs in a whistleblower lawsuit against Lincare have asked the court to overturn the decision.

The whistleblowers, Gerry Phalp and Matt Peoples, claim that unsolicited calls from Diabetic Experts of America, a Lincare subsidiary, violated Medicare statute, which forbids such calls unless the beneficiary has bought something from that company within the past 15 months.

In July 2015, U.S. District Judge Kathleen Williams sided with Lincare, ruling that Diabetic Experts is a subsidiary of Lincare, not a separate entity; therefore, because the beneficiaries had received oxygen supplies from Lincare within the 15-month time period before the calls, the calls did not violate the False Claims Act.

In arguments before the Eleventh Circuit on Nov. 16, however, the attorney for the whistleblowers, Simon Paris, argued that the court was wrong to conclude the definition of DME was ambiguous and that blood-testing supplies were, therefore, exempt from the statute.

Also during those arguments, Weili Justin Shaw, an attorney with the U.S. Department of Justice, told the court that Williams made the right decision, but used the wrong reasoning. He said that could damage future cases by allowing a defendant to dodge liability for violation of a regulatory requirement by proposing a reasonable alternate interpretation of the requirement, regardless of the defendant's intent.

Class action lawsuit filed against InfuSystem

DALLAS – A class action lawsuit has been filed against InfuSystem Holdings, alleging violations of the Securities Exchange Act of 1934.

The lawsuit alleges that, between May 12, 2015, and November 7, 2016, InfuSystem and several officers and directors used false and misleading statements and/or failed to disclose that the company lacked effective internal control over financial reporting.

It also alleges that the company’s financial statements from the start of 2015 overstated estimated accounts receivables collections and, in turn, overstated revenues and pre-tax income by a corresponding amount. As a result, those statements were materially false and misleading, and could not be relied on, the lawsuit alleges.

Following that announcement, InfuSystem stock dropped significantly, according to a press release from The Briscoe Law Firm, which is representing the class action.