U.S. Joins False Claims Suit Against Arriva Medical & Alere

The United States has intervened in a False Claims Act case alleging that Arriva Medical LLC (Arriva) and its parent Alere Inc. (Alere) submitted or caused false claims to the Medicare program for medically unnecessary glucometers and paid kickbacks to Medicare beneficiaries in the form of free glucometers and copayment waivers, the Justice Department announced today. Additionally, the government has informed the court that it is adding Ted Albin, a reimbursement consultant for Arriva, as an additional defendant in the action.
 
Arriva is a mail-order diabetic testing supply company based in Coral Springs, Florida, which, at one point, had operations in Antioch, Tennessee. Alere is a large medical device company based in Waltham, Massachusetts, which acquired Arriva in 2011. Both Arriva and Alere were acquired by Abbott Laboratories in September 2017, after the alleged conduct occurred. In October 2016, the Centers for Medicare & Medicaid Services (CMS) revoked Arriva’s billing number for billing Medicare for durable medical equipment that was shipped more than fourteen days after a beneficiary’s death. Arriva subsequently stopped operating in December 2017.
 
The False Claims Act lawsuit alleges, among other things, that Arriva, with the oversight and approval of Alere, offered “free upgrades” of glucometers to Medicare beneficiaries. Because Arriva required all new customers to receive a new meter, regardless of whether they already had a functioning meter, Arriva allegedly routinely submitted false claims to Medicare for medically unnecessary meters. Arriva also allegedly made no meaningful effort to collect copayments from beneficiaries for the meters or diabetic testing supplies subsequently purchased from Arriva for use in connection with the meters. The waiver of patient copays or provision of other benefits to induce patients to purchase a company’s items or services is prohibited by the Anti-Kickback Statute. 
 
“We will seek to hold accountable healthcare providers that attempt to profit by providing illegal inducements and by billing for unnecessary items,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “We will continue to take appropriate legal measures to protect Medicare funds and to ensure a fiscally sound program that can serve all of our senior citizens.”
 
“When medical equipment companies scheme to enrich themselves by unlawfully increasing the sales volume of durable medical equipment, they place our federal healthcare programs in jeopardy,” said U.S. Attorney Cochran. “The restrictions imposed by federal statutes exist to prevent improper practices, including providing unnecessary medical equipment and billing Medicare for it. We will continue to enforce the laws that protect the integrity of federal healthcare programs.” 
 
“Medicare rules bar payment for medically unnecessary services and supplies,” said Derrick L. Jackson, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General. “Such schemes only benefit suppliers billing for products that patients neither want nor need.”
 
The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act, which allow private parties to file suit on behalf of the United States for false claims and to receive a share of any recovery. The act permits the United States to intervene and take over responsibility for litigating these cases, as it has done here in part. A defendant who violates the act is subject to three times the government’s losses, plus applicable penalties.
 
This case is being handled by the Justice Department’s Civil Division and the United States Attorney’s Office for the Middle District of Tennessee, with assistance from the Office of Inspector General of the Department of Health and Human Services. The case is captioned United States ex rel. Goodman v. Arriva Medical LLC; Alere, Inc., Case No. 3:13-cv-00760 (M.D. Tenn.).
 
The claims in which the United States has intervened are allegations only, and there has been no determination of liability.