During 2012, the medical device and equipment industry in the U.S. grossed revenues of more than $64 billion. Since that time, revenues have only increased and are expected to continue to skyrocket in the coming years. With so much money at stake, competition between medical equipment and device makers is fierce. At times, some companies may resort to business practices that teeter on or cross over the line of not only being unethical, but also illegal.
The U.S. Department of Justice recently announced that it reached a $34.8 million settlement with Respironics Inc., a company that makes masks to help treat sleep apnea. The settlement relates to a qui tam lawsuit which was originally filed by a doctor who worked with the medical equipment provider.
According to the lawsuit, Respironics Inc. was accused of violating provisions of both the False Claims Act and the Anti-Kickback Statute when the company provided free call center services to medical equipment suppliers on the condition that clients purchased Respironics Inc. products. In cases where clients did not purchase sleep apnea masks from Respironics Inc., medical equipment supplies were charged a call service fee.
To preserve the integrity of the U.S. health care system, under the Anti-Kickback Statute, companies are banned from engaging in the "conscious and willful payment to induce the referral of services or products that are paid by federal healthcare programs such as Medicaid and Medicare."
Pursuant to the settlement, the whistleblowing doctor who originally filed the qui tam lawsuit will receive $5.38 million.
Source: Tech Times, "Sleep Apnea Mask Maker Respironics To Pay $34.8 Million For Alleged Kickbacks," March 25, 2016