The U.S. Attorney’s Office of the District of South Carolina announced on March 23, 2016 that Pennsylvania-based Respironics Inc. (“Respironics”) has agreed to pay $34.8 million to resolve alleged False Claims Act violations for paying kickbacks in the form of free call center services to durable medical equipment (DME) suppliers that bought its masks for patients with sleep apnea.
Respironics ran afoul of the False Claim Act and the Anti-Kickback Statute by allegedly providing free services to DME suppliers from April 2012 until November 2015 to induce them to purchase Respironics masks that treat sleep apnea. Specifically, Respironics was alleged to have provided DME companies with call center services to meet their patients’ resupply needs at no charge as long as the patients were using masks that Respironics manufactured, but DME companies would have to pay a monthly fee based on the number of patients who used masks manufactured by a competitor of Respironics.
Respironics will pay roughly $34.14 million to the federal government and roughly $660,000 to various state governments based on their participation in the Medicaid program.
The Anti-Kickback Statute
The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute are also false claims under the False Claims Act.
The settlement resolves a lawsuit originally brought by a physician who worked for different DME companies. The physician will receive $5.38 million out of the federal share of the recovery under the qui tam provisions of the False Claims Act, which permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery.
In announcing the settlement with Respironics, the U.S. Attorney of the District of South Carolina stated, “This office has made a substantial commitment to combating fraud. Our commitment has made this district one of the leaders on behalf of whistleblowers. We hope that those who commit fraud will recognize that it is our goal to make the consequences more than just the cost of doing business.”
The lawsuit filed by the physician is captioned United States et al. ex rel. Dr. Gibran Ameer v. Philips Electronics North America, et al., Case No. 2:14-cv-2077-PMD (D.S.C.).
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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