On Monday, August 2, the Department of Justice announced that Arriva Medical LLC (“Arriva”) and its parent company, Alere Inc. (“Alere”), agreed to pay $160 million to settle claims that they violated the False Claims Act.  Arriva was one of the largest mail-order diabetic supply companies in the nation until it ceased business operations in December 2017. Alere is a medical device company based in Abbott Park, Illinois, which acquired Arriva in November 2011. In 2013, a whistleblower brought suit against Arriva and Alere under the qui tam provisions of the False Claims Act. The United States subsequently intervened in the suit.

The settlement resolves allegations that Arriva and Alere caused the submission of false claims to Medicare for glucometers because (i) from April 2010 until the end of 2016, Arriva, with Alere’s approval, paid kickbacks to Medicare beneficiaries by providing them with free meters, while routinely waiving their copayments for these meters; (ii) Arriva, with Alere’s approval, allegedly billed Medicare for a meter for every new patient without regard to the patient’s eligibility; (iii) Arriva allegedly repeatedly billed Medicare for new meters for existing patients before their eligibility renewed; and (iv) Arriva allegedly submitted false claims to Medicare on behalf of beneficiaries who were deceased.  The Settlement Agreement does not contain admissions of wrongdoing on the part of Arriva or Alere.

According to the Department of Justice, this is the largest single False Claims Act settlement by the U.S. Attorney’s Office for the Middle District of Tennessee and one of the largest settlements for allegations of kickbacks involving durable medical equipment in the United States.

Related links available at: Arriva Settlement; DOJ Press Release; Law 360 Coverage