DME Manufacturer Settles in Alleged False Claims Act Violation
Respironics to pay over $24 million in kickbacks scheme.
Maryland, other states, and the federal government have reached a settlement with Philips RS North America LLC on behalf of Respironics, a subsidiary to resolve alleged false claims. The durable medical equipment (DME) manufacturer of devices such as ventilators, oxygen concentrators, CPAP and BiPAP machines, and other respiratory-related medical equipment is accused of false claims submissions to Medicare, Medicaid, and TRICARE (the federal healthcare program for active military members and their families).
Philips RS has agreed to pay over $24 million to settle the allegations since state and federal programs are involved. The state of Maryland received $139,772.07 of the settlement. In addition, Respironics will pay $22.62 million to the United States and $2.13 million to other states, including Delaware, Florida, Indiana, Illinois, New York, Pennsylvania, South Carolina, Tennessee, and Washington.
Kickbacks Violate False Claims Act
The charges arose from a qui tam (whistleblower) action that accused Respironics of violating the False Claims Act for providing kickbacks to DME suppliers between Nov. 1, 2014, and April 30, 2020. 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 and is subject to liability under the False Claims Act.
Claims against Respironics cite it for creating a situation where DME suppliers submitted false claims to Medicaid. Respironics allegedly provided DME suppliers with illegal inducements, including free physician prescribing data that could assist their marketing efforts to physicians.
“Submitting false claims for reimbursement to the state is fraud, and unlawfully siphons money away from critical government programs and operations that serve the needs of Maryland residents,” said Attorney General Anthony G. Brown. “We’re pleased that under this settlement, programs that serve healthcare needs, particularly of vulnerable Marylanders, will receive their money back.”
OIG Mandates Respironics to Implement Corporate Integrity Agreement
In addition to the civil settlement, Respironics entered into a five-year Corporate Integrity Agreement that requires the company to implement and adhere to robust compliance that includes a review with referral sources and monitoring Respironics’ sales force. The agreement also requires Respironics to retain an independent monitor selected by the Office of Inspector General to assess the company’s compliance systems.
“Paying kickbacks to medical equipment providers is misaligned with patient care and corrupts our nation’s healthcare programs including TRICARE,” said Special Agent in Charge Christopher Dillard for the Department of Defense Office of Inspector General, Defense Criminal Investigative Services. “Working closely with our law enforcement partners, DCIS will continue to investigate those who risk harming the welfare of our active-duty service members and seek to profit at the expense of the American taxpayer.”
Sources:
https://www.marylandattorneygeneral.gov/press/2023/032823a.pdf