The United States Department of Justice has once again settled a False Claims Act case, this time involving one of the largest medical and healthcare companies in the country.
Earlier this month, the Justice Department shared an official press release, confirming that it had reached a settlement with Arriva Medical LLC (Arriva) - a Florida-based company that provides Medicare mail-order diabetic testing supplies.
Arriva has been around since 2008. The company grew to become the largest Medicare mail-order diabetic testing supplies provider in the United States, supplying products such as lancets, blood glucose testing strips, glucose meters, and more across the nation.
Pushing Fake Numbers on Multiple Fronts
Arriva Medical LLC provides home delivery of diabetes and testing supplies. The Company supplies glucose meters, blood glucose testing strips, lancets, lancing devices, meter batteries, and control solutions. Arriva Medical ships medical supplies to individuals in the United States. In its press release, the Justice Department explained that Arriva had paid kickbacks to Medicare beneficiaries, billed Medicare for services which it provided to deceased parents, and even billed Medicare for patients who weren’t eligible for products like glucose meters.
By doing this, Arriva Medical allegedly caused these Medicare beneficiaries to select its glucometers and suppliers. This was joined by the fact that the company promised to offer free diabetes testing materials to these patients.
Arriva medical also allegedly waived copayments for services that Medicare would ideally get copayments from. In some cases, it would actively fail to make efforts to get these copayments. Thus, patients were getting glucose testing materials completely free of charge. Medicare rules provide that eligible patients can get new glucose testing materials once every five years. But, Arriva Medical offered these products to patients and went on to bill Medicare for them - even more often than it would give them to patients.
Lastly, Arriva Medical was accused of submitting false claims to Medicare for glucometers as it gave these tools to every new patient it had, regardless of their medical requirements. The company had been doing all of this from April 2010 to 2016, in collaboration with its parent company - Alere Inc. (Alere).
The Justice Department confirmed that Arriva and Alere were the defendants in the case. While it didn't confirm Alere’s role in the fraud, it is most likely that the company knew about what Arriva was doing and didn’t bother to put a stop to it. After all, a boost to Arriva’s bottom line will be a boost for Alere as well.
Gregory Goodman Saves the Day
Eventually, things hit a snag when a former worker for Arriva reported the company and its crimes to the authorities. The whistleblower, whose name is Gregory Godman, worked as a call center representative for Arriva at one of its Tennessee-based outlets.
Goodman reportedly got suspicious when he noticed that Arriva and Alere were pushing customer care representatives to sell glucose testing materials and waive copayments. He eventually reported the company to the authorities years ago, resigning in the process and becoming the central figure in the case. As part of the case, the Medicare program revoked the rights of Arriva’s Medicare supplier - an unnamed company.
The Civil Division’s Litigation Branch in Tennessee led the case, with assistance from the Fraud Section at the United States Attorney’s Office for the Middle District of Tennessee and the Tennessee Bureau of Investigation.
Punishment for High Crimes
At the end of the day, Arriva and Alere agreed to pay $160 million for the crimes they committed. Goodman, who was the instigator of this case, will get $28,548,749 for his role. This is in line with the False Claims Act - America’s strongest protection law for whistleblowers.
Enacted centuries ago, the False Claims Act posits that people can be eligible for monetary compensation when they bring attention to a case of fraud - especially one in which the Federal Government suffers a financial loss. For their insights, the whistleblowers can receive anywhere between 15 and 30 percent of the proceeds.
Speaking on the case, Derrick L. Jackson, the Special Agent in Charge at the Office of the Inspector General at United States Department of Health and Human Services, said:
“Engaging in activities that result in the submission of false claims to Medicare diverts funding from the necessary treatment and medical supplies beneficiaries need. We will continue working with our law enforcement partners to hold accountable those who seek to enrich themselves by submitting false claims to federal health care programs.”