“Free” Costs Taxpayers: Mail-Order Diabetic Testing Company Settles for $160 Million
August 10, 2021. The United States Department of Justice settled a False Claims Act case against one of the nation’s largest Medicare mail-order diabetic testing suppliers and its parent company for $160 million. A whistleblower, who was a call center employee, brought the supplier’s alleged wrongdoing to light. The whistleblower is receiving $28,548,749 as their share of the recovery.
According to the allegations, Arriva Medical LLC (Arriva) and its parent company, Alere Inc. (Alere) paid kickbacks to Medicare beneficiaries, billed Medicare for patients who were ineligible to receive glucose meters, or billed Medicare for services for deceased patients. Over approximately six years, the testing supplier allegedly induced Medicare beneficiaries to choose their company’s glucometers and supplies by promising patients “free” or “no cost” diabetes testing materials. For services which Medicare beneficiaries would normally owe copayments, the supplier allegedly “routinely waived, and failed to make reasonable efforts to collect” copayments, effectively making the glucometers and test strips “free” to patients. Under Medicare rules, eligible patients can get a new glucometer once every five years. The supplier allegedly provided patients and subsequently billed Medicare for meters more often than patients were eligible. Additionally, the supplier allegedly submitted false claims to Medicare for glucometers for every new patient, regardless of medical need. The supplier finally lost its Medicare supplier number in 2016 when it was caught submitting false claims to Medicare on behalf of deceased beneficiaries.
In providing health insurance services, Medicare serves as part of the social safety net for the elderly and other vulnerable populations. Providers, suppliers, and healthcare systems submitting false claims to Medicare violate the intention of the program, defraud taxpayers, and divert funds away from those in need. A whistleblower reported their employer to the government, courageously identifying wrongdoing, which harms not only improperly-billed and -treated patients, but also taxpayers funding Medicare. The Department of Justice needs whistleblowers to report Medicare fraud and stop those who seek to make a mockery of this healthcare system.