Medical Equipment Co. to Pay $37.5M to Settle Kickback Claims

The U. S. Department of Justice (DOJ) announced on January 15 that ResMed Corp., a San Diego-based manufacturer of durable medical equipment, will pay $37.5 million to the federal government to settle five qui tam (whistleblower) cases under the False Claims Act (FCA) alleging that ResMed paid kickbacks to DME suppliers, sleep labs and other healthcare providers. The whistleblowers, including a former ResMed sales representative, will receive a total of more than $6 million from the settlement payment.

The DOJ’s press release referenced numerous alleged violations of the federal Anti-Kickback Statute, which prohibits providing anything of value to induce the referral of items or services that are reimbursable by Medicare, Medicaid, and other federal healthcare programs. ResMed also allegedly submitted false claims related to the sale of equipment for sleep apnea and other disorders, triggering potential liability under the FCA.

ResMed issued a statement saying that it had not violated any laws but decided to enter into the settlement “in the best interests of patients, ResMed shareholders, customers, and employees.” The company had already disclosed the general terms of the settlement in its quarterly earnings statement released in July. In addition to the settlement payment, ResMed agreed to a corporate integrity agreement under which it will be required to alter its product pricing and sales procedures and monitor its arrangements with referral sources.