Recently, Abbott Laboratories agreed to pay $160 million to resolve claims that two of its units submitted false claims to Medicare by providing kickbacks to diabetes patients, including low or no-cost glucose monitors.
The allegations were brought by a former call center employee for Arriva Medical LLC (Arriva’s parent company Alere Inc was bought by Abbott in October 2017). According to the whistleblower, Arriva was providing free glucose monitors to encourage patients to order more testing supplies and would routinely waive copayments for Medicare beneficiaries. According to the Department of Justice (DOJ), this took place from April 2010 to the end of 2016.
Specifically, the United States alleged that Arriva advertised that glucometers would be “free.” During intake calls, employees would offer Medicare beneficiaries a “no cost guarantee,” under which Arriva would provide the meters at “no cost” if Medicare denied payment. Medicare often denied the payment because the beneficiaries were not yet entitled to a new glucometer under the program. Arriva also allegedly offered and provided existing customers new “free” meters to induce them to reorder testing supplies from the company.
According to the DOJ, Arriva would also routinely waive or fail to make reasonable efforts to collect Medicare copayments. The company would either not send invoices to beneficiaries or fail to take other basic steps, like sending collection letters or making phone calls, to collect copayments. Specifically, Arriva would systematically waive “small” copayments without even telling beneficiaries about the copayment obligation. The company also allegedly automatically waived unpaid copayments after sending three invoices or less, with no additional collection efforts. Arriva was also known to allegedly waive copayments if a customer referenced the advertising that indicated their supplies would be free.
The settlement further resolves allegations that Arriva and Alere caused the submission of false claims to Medicare for glucometers because Arriva, with Alere’s approval, systematically provided a meter to all of its new patients, irrespective of the patient’s eligibility. Arriva would then bill Medicare for the meter. Arriva also allegedly billed Medicare for new meters for existing patients where Arriva itself had previously billed Medicare for meters for those patients within the five-year window allowable by Medicare.
Arriva was also accused of systematically charging Medicare for glucometers given to ineligible patients and submitting claims for 211 patients who had been dead for at least two weeks. Medicare previously revoked Arriva’s Medicare supplier number in November 2016 for these transgressions.
Arriva was previously the nation’s largest Medicare mail-order diabetic testing supplier. It ceased business operations in December 2017, two months after Alere was acquired by Abbott.
The founders of Arriva, David Wallace and Timothy Stocksdale, previously paid $1 million to resolve allegations that they participated in the kickback scheme.