September 27, 2022. The United States Department of Justice settled a case against Philips subsidiary Respironics, a durable medical equipment manufacturer, for allegations that the company engaged in kickbacks to increase sales of its respiratory-related medical equipment. Under the terms of the settlement, the durable medical equipment (DME) manufacturer paid more than $24 million, with $22.62 million as part of the federal settlement and $2.13 million to states whose Medicaid programs were allegedly bilked in this scheme. The whistleblower is an employee of the company and will receive 19% of the settlement, or approximately $4.3 million, for filing a qui tam lawsuit and reporting misconduct.
Respironics manufactures various kinds of DME which help people breathe, including CPAP and BiPAP machines, oxygen concentrators, ventilators, and other devices. The manufacturer then sells these items to DME suppliers, which submit claims to government-funded health programs when Medicare, Medicaid, and TRICARE beneficiaries purchase these items. The fraud scheme entailed the manufacturer allegedly providing kickbacks in the form of “physician prescribing data” to its suppliers; this data allowed the suppliers to better target their marketing to physicians who were more likely to prescribe these devices. According to the complaint, this case was not Respironics’ first rodeo, citing a 2016 settlement for the same kickback scheme, for which the company paid a $34 million settlement and entered into a Corporate Integrity Agreement (CIA).
The Anti-Kickback Statute (AKS) holds that both those who pay and receive kickbacks are responsible for violating this criminal law. When companies pay medical providers any kind of “remuneration” in order to drive up claims to federal healthcare programs, the kickbacks become subject to the False Claims Act, because those claims are tainted by the kickbacks. An Official of the Department of Health and Human Services, Office of the Inspector General (HHS-OIG) summed it up best in this case: “By paying kickbacks to obtain patient referrals, DME manufacturers are prioritizing financial incentives over patient needs, which undermines the integrity of federal health care programs.” Medical providers are liable under the AKS regardless of whether patients were harmed or the government suffered financial losses, because “in the Federal health care programs, paying for referrals is a crime.”
Medicare provides healthcare coverage to Americans over the age of 65; Medicare is a state- and federally funded program offering healthcare insurance for low-income people; and TRICARE covers U.S. military personnel and their families. Taxpayers fund these programs as part of the social contract that is insurance. Those who seek to undermine these programs for personal gain are taking funds away from those whom society has deemed deserving of assistance. Whistleblowers can deter and stop this theft through initiating qui tam lawsuits on behalf of the government.
If you would like to report Medicare, Medicaid, or TRICARE fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Eva was the Senior Counsel for Health Care Fraud. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Eva Gunasekera at [email protected] or contact Renée at [email protected] (tel.: 202-417-3664). Visit Tycko & Zavareei LLP’s website for whistleblowers to learn more at https://www.fraudfighters.net/.