by Ben Vernia | February 14th, 2023
On February 13, the Department of Justice announced that Spacelabs Healthcare, a subsidiary of OSI Systems, Inc., had agreed to pay $2.5 million to settle allegations, originally brought by two whistleblowers, that the company defrauded DOD and the Department of Veterans Affairs. According to DOJ’s press release:
Spacelabs Healthcare, LLC (Spacelabs) has agreed to pay $2.5 million to resolve False Claims Act allegations that it overcharged the United States for patient monitoring equipment sold to the U.S. Department of Veterans Affairs (VA) and the Department of Defense.
“Those who do business with the United States must comply with their contractual commitments,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will ensure that the government gets the prices it bargained for when it cares for the health of our veterans and service members.”
The settlement announced today resolves allegations that from 2014 to 2019, Spacelabs failed to follow the Price Reductions Clause in a VA contract, which required Spacelabs to provide the government with certain lower prices offered to another customer, resulting in the government paying more than it should have for patient monitoring equipment. The settlement also resolves allegations that Spacelabs failed to follow a related clause in a Defense Logistics Agency contract.
“Federal contractors are expected to deal honestly with federal agencies and faithfully abide by the terms of their government contracts,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “This settlement demonstrates that our Office will diligently investigate and hold accountable those companies that fail to live up to their end of the bargain and unfairly overcharge taxpayers.”
“This settlement sends a clear message that the VA OIG will actively investigate allegations involving contractors overbilling for products provided to VA,” said Special Agent in Charge Kim R. Lampkins of the Department of Veterans Affairs Office of Inspector General’s Mid-Atlantic Field Office. “The VA OIG will continue to work with the Department of Justice and our law enforcement partners to ensure the integrity of VA programs and services.”
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The government announced that the whistleblowers, former Spacelabs employees, will receive $437,500 (a 17.5% relators’ share).
