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ResMed settles lawsuit over alledged kickbacks
#1
ResMed settles lawsuit over alledged kickbacks
This news release by the Department of Justice reports that ResMed settled a lawsuit alleging the company use using kickbacks to increase sales. 

JUSTICE NEWS

Department of Justice
Office of Public Affairs



FOR IMMEDIATE RELEASE
Wednesday, January 15, 2020


Resmed Corp. to Pay the United States $37.5 Million for Allegedly Causing False Claims Related to the Sale of Equipment for Sleep Apnea and Other Sleep-Related Disorders

ResMed Corp., a manufacturer of durable medical equipment (DME) based in San Diego, California, has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other health care providers, the Department of Justice announced today.
   
“Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on unlawful payments from equipment manufacturers.”


The Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE.  Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.

The settlement resolves allegations that ResMed (a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea, (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines, © arranged for, and fully guaranteed the payments due on, interest-free loans that DME supplies acquired from third-party financial institutions for the purchase of ResMed equipment, and (d) provided non-sleep specialist physicians free home sleep testing devices referred to as “ApneaLink.”

“This settlement represents another example of our district’s commitment to prosecuting violations of the False Claims Act and the Anti-Kickback Statute,” said Lance Crick, Acting U. S. Attorney for the District of South Carolina.  “Medical decisions should be based on what is in the best interest of the patient and not based on financial incentives and related schemes.”

“Medical decisions should always be made without outside influence caused by cash payments, free goods, or other types of illegal remuneration, and we will continue to take action to prevent attempts to induce medical decisions through illegal kickbacks,” said Katherine L. Parker, Civil Chief, U.S. Attorney’s Office for the Southern District of California.  “We applaud the whistleblower for coming forward and notifying the United States.”

“Illegal kickbacks in the federal healthcare system create an unfair marketplace and the potential that medical decisions are not based on what is best for patients,” said U.S. Attorney Peter E. Deegan Jr. for the Northern District of Iowa.  “This settlement is another sign of our office’s dedication to fair and full enforcement of the False Claims Act.”

“When companies give free equipment to doctors for the sole purpose of generating business and increasing their bottom lines, federal health insurance programs should not foot the bills.  This case rights that alleged wrong by ResMed,” said U.S. Attorney Richard P. Donoghue for the Eastern District of New York.  “We will continue to work with our law enforcement partners to hold accountable companies that put profits before patients.”

Contemporaneous with the civil settlement, ResMed entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General.  The CIA requires, among other things, that ResMed implement additional controls around its product pricing and sales and that ResMed conduct internal and external monitoring of its arrangements with referral sources.

The agreement resolves five lawsuits originally brought by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims.  The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery.  The whistleblowers will collectively receive a roughly $6.2 million share of the settlement. 

“The government contended ResMed provided free goods and services to companies in order to sell more medical equipment bought by taxpayers,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “The OIG’s integrity agreement with ResMed is designed to ensure such alleged behavior will not be repeated.”

“I applaud the Department of Justice and the U.S. Attorneys' for their continued efforts to hold health care providers accountable to the American taxpayer," said Army Lt. Gen. Ron Place, Director of the Defense Health Agency. “The efforts of the Department of Justice safeguard the health care benefit for our service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate all those who participated in fraudulent practices.”

This settlement was the result of a coordinated effort by the Civil Division of the United States Department of Justice; the U.S. Attorney’s Offices for the District of South Carolina, the Southern District of California, the Northern District of Iowa, and the Eastern District of New York; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; the Defense Criminal Investigative Service; the Defense Health Agency Office of General Counsel; the Federal Bureau of Investigation; and the National Association of Medicaid Fraud Control Units.  

The lawsuits resolved by this settlement are captioned United States, et al., ex rel. Ameer v. ResMed, Inc., et al., Case No. 2:15-CV-04842-MBS (D.S.C.); United States, et al., ex rel. Baker v. ResMed, Inc., et al., Case No. 3:16-CV-00987-MBS (D.S.C.); United States, et al., ex rel. Ross v. ResMed, Inc., Case No. 16-CV-1988-W (JLB) (S.D. Cal.); United States ex rel. Meyer v. ResMed, Inc., et al., Case No. 17-CV-12-MWB (N.D. Iowa); and United States, et al., ex rel. Ottavio, et al. v. ResMed, Inc., Case No. CV 17-5734 (E.D.N.Y.).  

The claims resolved by the settlement are allegations only, and there has been no determination of liability. 



In their response as reported in another article by FierceHealthcare, ResMed clearly indicates the patient is not their customer:


In a statement issued Wednesday, ResMed executives said that the company denies it violated the law and decided to make a civil settlement "in the best interests of patients, ResMed shareholders, customers, and employees."
ResMed Chief Administrative Officer and Global General Counsel David Pendarvis said in the statement.

"ResMed has not violated any laws; its business practices are conducted in full accordance with U.S. laws and regulations. That said, we are pleased to put this matter behind us and avoid the expense, inconvenience, and distraction it would cause to gain the favorable outcome we deserve," Pendarvis said.

"This settlement does not impact our ability to sell products in the United States, nor does it impact the reimbursement of our products by federal health programs. We have always acted in good faith with patients and our valued customers, and we do not expect this to impact our relationship with either," he said.
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#2
RE: ResMed settles lawsuit over alledged kickbacks
Thanks for posting that. Very interesting indeed! It doesn't surprise me in the least, that it occurred, or that ResMed denies any wrong-doing. 

I had some suspicions of my own. Nothing concrete, but something none-the-less.
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#3
RE: ResMed settles lawsuit over alledged kickbacks
This is practically universal practice in the industry. Who knew that it was selectively enforced?
Sleeprider
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INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED AS MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEB SITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.
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#4
RE: ResMed settles lawsuit over alledged kickbacks
It doesn’t look any different than the free samples doctors receive from medical suppliers.
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#5
RE: ResMed settles lawsuit over alledged kickbacks
Kickbacks are SOP in the medical mafia, unfortunately.

Not exactly the same as this ResMed case, but you can check individual doctor kickbacks here:

https://projects.propublica.org/docdollars/
SuperSleeper
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INFORMATION ON APNEA BOARD FORUMS OR ON APNEABOARD.COM SHOULD NOT BE CONSIDERED AS MEDICAL ADVICE. ALWAYS SEEK THE ADVICE OF A PHYSICIAN BEFORE SEEKING TREATMENT FOR MEDICAL CONDITIONS, INCLUDING SLEEP APNEA. INFORMATION POSTED ON THE APNEA BOARD WEB SITE AND FORUMS ARE PERSONAL OPINION ONLY AND NOT NECESSARILY A STATEMENT OF FACT.




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#6
RE: ResMed settles lawsuit over alledged kickbacks
And, now we understand that recent crack-down from ResMed to its distributors, whatever it was...maybe back in Oct/Nov?  Wasn't it about pricing? I have forgotten...
Serial Tapist
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#7
RE: ResMed settles lawsuit over alledged kickbacks
If you're surprised and you know it clap your hands...

(dead silence)
PaulaO

Take a deep breath and count to zen.




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#8
RE: ResMed settles lawsuit over alledged kickbacks
Thanks MitchS.

Sorry I'm holding a coffee and can't clap. Not that I'm surprised by the news report. Like the Boss called it, SOP. Maybe a token lawsuit gotcha to show everyone the enforcement of law does happen sometimes, but what do I know.

OK back to my Coffee
Dave
I'm not a doctor in real or fictional life. My posts include opinions based upon user experience and researched info regarding CPAP therapy and should not be considered medically professional directions or advice.

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#9
RE: ResMed settles lawsuit over alledged kickbacks
What caught my attention was they referred to their patients and customers twice in their statement indicating they don't view patients as their customer, which we already knew.
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#10
RE: ResMed settles lawsuit over alledged kickbacks
I work for Philips and if the dreamstation is built how the product I make is (Quantity over quality at all costs so managers get there bonuses) I say keep getting ResMed machines in more hands any way they can. IMO
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