Medical equipment manufacturer Respironics Inc. will pay the government $34.8 million for allegedly providing kickbacks – in the form of free call center services – to durable medical equipment (DME) suppliers in exchange for their buying Respironics sleep apnea masks.

The Anti-Kickback Statute prohibits the making of knowing and willful payments to induce the referral of services or other items that are paid for by a federal healthcare program. Claims submitted to these federal programs – which include Medicare, Medicaid, and TRICARE – in violation of the Anti-Kickback Statute are also false claims under the False Claims Act (FCA).

Respironics allegedly provided DME companies with free call center services to meet their patients’ resupply needs as long those patients were using Respironics-manufactured masks. According to the Department of Justice (DOJ) lawsuit, DME companies providing their patients with a competitor’s masks had to pay a monthly fee. The government alleged that the Pennsylvania-based company provided the call center kickbacks from April 2012 until November 2015.

The lawsuit was originally brought by whistleblower Dr. Gibran Ameer under the qui tam provisions of the FCA. The FCA permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and share in any recovery. Under the DOJ settlement, Dr. Ameer, who has worked for different DME companies, will receive $5.38 million out of the federal share of the recovery.

“Medical equipment manufacturers that boost profits by providing kickbacks to suppliers will be held accountable for their improper conduct,” said Special Agent in Charge Derrick L. Jackson of the Department of Health and Human Services, Office of Inspector General (HHS-OIG).  “We will continue to investigate such business arrangements, which threaten the integrity of federal healthcare programs.”

Read the full DOJ press release.

To report healthcare fraud, contact Frohsin & Barger.