Government joins whistleblower’s suit against diabetic care companies

by Ben Vernia | February 19th, 2019

On February 19, the Department of Justice announced that it was intervening in a whistleblower’s qui tam lawsuit against two companies involved in health care for people suffering from diabetes – Arriva Medical, LLC and Alere, Inc. – alleging the companies provided kickbacks to patients. According to DOJ’s press release:

The United States has intervened in a False Claims Act case alleging that Arriva Medical LLC (Arriva) and its parent Alere Inc. (Alere) submitted or caused false claims to the Medicare program for medically unnecessary glucometers and paid kickbacks to Medicare beneficiaries in the form of free glucometers and copayment waivers, the Justice Department announced today.   Additionally, the government has informed the court that it is adding Ted Albin, a reimbursement consultant for Arriva, as an additional defendant in the action.

Arriva is a mail-order diabetic testing supply company based in Coral Springs, Florida, which, at one point, had operations in Antioch, Tennessee.  Alere is a large medical device company based in Waltham, Massachusetts, which acquired Arriva in 2011.  Both Arriva and Alere were acquired by Abbott Laboratories in September 2017, after the alleged conduct occurred.  In October 2016, the Centers for Medicare & Medicaid Services (CMS) revoked Arriva’s billing number for billing Medicare for durable medical equipment that was shipped more than fourteen days after a beneficiary’s death.  Arriva subsequently stopped operating in December 2017.

The False Claims Act lawsuit alleges, among other things, that Arriva, with the oversight and approval of Alere, offered “free upgrades” of glucometers to Medicare beneficiaries. Because Arriva required all new customers to receive a new meter, regardless of whether they already had a functioning meter, Arriva allegedly routinely submitted false claims to Medicare for medically unnecessary meters.  Arriva also allegedly made no meaningful effort to collect copayments from beneficiaries for the meters or diabetic testing supplies subsequently purchased from Arriva for use in connection with the meters.  The waiver of patient copays or provision of other benefits to induce patients to purchase a company’s items or services is prohibited by the Anti-Kickback Statute.

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