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Liberty Medical granted judgment tied to federal overpayment claims
By Caroline Salls
Pittsburgh, Feb. 7 - Liberty Medical Supply, Inc. was granted a summary judgment disallowing claims filed by former employees Lucas W. Matheny and Deborah Loveland in connection with millions of dollars in federal healthcare payor overpayment claims, according to a Feb. 6 filing with the U.S. Bankruptcy Court for the District of Delaware.
Judge Peter J. Walsh said in Thursday's ruling that Matheny and Loveland's primary allegation is that Liberty received millions of dollars in what they called overpayments from federal health care payors, such as Medicare and Medicaid, that Liberty allegedly never repaid or reported to the government per its corporate integrity agreement (CIA).
The former employees also alleged that Liberty created false records during the annual paid claims reviews mandated by the CIA and conducted by independent auditors.
Walsh said the Department of Justice spent more than a year investigating the claims and subsequently declined to intervene in the case.
The judge said Matheny and Loveland's "claims remain unsubstantiated."
"There has been no proof of a false record or statement," Walsh said in his ruling. "There has been no proof of Liberty's knowledge of any falsity.
"There has been no proof that Liberty made, used or caused a false statement for the purpose of concealing, avoiding or decreasing money owed to the federal government.
"There has been no proof that Liberty had any specific legal monetary obligation owed to the federal government by which it attempted to fraudulently circumvent."
Liberty Medical, a Port St. Lucie, Fla.-based health-care products home delivery provider, filed for bankruptcy on Feb. 15, 2013. The Chapter 11 case number is 13-10262.
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