For 14 years, Sally Jo Robins worked in billing and accounts receivable at Lincare in Amherst, rising through the ranks to become a supervisor and trainer.
For about half that time, Kathleen Dunlap, a Town of Tonawanda resident, worked under Robins.
No one knew at the time, but Robins – of Buffalo – and Dunlap became whistleblowers in a lawsuit accusing Lincare, one of the nation's largest providers of in-home oxygen equipment, of overbilling Medicare.
The suit, now eight years old, ended this week in a $20 million settlement, according to court papers.
At the heart of the case was the allegation by Robins, Dunlap and two other former employees in Massachusetts that Lincare used abusive and fraudulent practices in overbilling the Medicare program.
Their suits, filed in 2009 and 2010, also accused the company, which has branch offices across the country, of fabricating evidence to support claims and offering kickbacks to doctors in order to increase referrals.
"The case has in fact been settled and compromised," Daniel C. Oliverio, the lead attorney for Robins and Dunlap, said Wednesday.
Oliverio declined to comment on the amount of the settlement.
In their suit, Robins and Dunlap said Lincare adopted its fraudulent practices in order to offset revenues lost by congressional budget cuts to Medicare.
The suit also notes that the company, as a major provider of in-home oxygen equipment, serves a population that is largely 65 or older and on Medicare.
The abusive practices, according to the suit, included billing Medicare for customers who had already returned their oxygen equipment or, in some cases, died.
Lincare acknowledged no liability as part of the settlement and, in court papers, argued that simple billing mistakes were at the crux of the lawsuit. Company officials could not be reached for comment Wednesday.
Dunlap and Robins filed their suit under the False Claims Act, which allows whistleblowers to sue parties and recover taxpayers' money on behalf of the government. If the suit is successful, the law allows for the whistleblowers to receive a portion of the money recovered from the parties.
Federal prosecutors in Boston, where the Lincare settlement was reached, signed off on the agreement but declined to comment.
The government will receive a portion of the settlement but the lion's share, about $11 million, will be split among the four former Lincare employees who filed the initial lawsuits against the company.