ResMed Corp. To Pay $37.5 Million In FCA Settlement

Blog Post Authors: John Roberts (jroberts@sfmslaw.com); Nicolas A. Lussier (nlussier@sfmslaw.com)

On January 15, 2020, medical equipment manufacturer ResMed Corp. (“ResMed”) agreed to pay $37.5 million to settle claims brought against it in five qui tam lawsuits under the False Claims Act (“FCA”) and Anti-Kickback Statute (“AKS”).  The underlying lawsuits alleged that ResMed  was providing illegal kickbacks to suppliers, sleep labs, and other health care providers in the form of free home sleep testing devices, below-cost diagnostic equipment, and free call center and patient outreach services.  In return for these kickbacks, the recipient healthcare providers allegedly began exclusively prescribing ResMed equipment to patients.  ResMed allegedly charged the equipment provided to Medicare, Medicaid, and TRICARE, in violation of the FCA.

News of this settlement follows the release of a report from the U.S. Department of Justice (“DOJ”) that provided FCA Statistics for Financial Year 2019. According the release, the DOJ obtained more than $3 billion in recovery relating to FCA judgments and settlements in 2019.  Of this recovery, $2.6 billion came from cases involving fraud in the healthcare industry.

The DOJ report also confirmed that qui tam suits remain a crucial vehicle for FCA recovery, noting that such suits accounted for $2.1 billion of the total settlement and judgment amounts reported in 2019.  The government paid out $265 million in whistleblower awards to individuals who brought these suits and alerted the government to fraud.  In 2019 alone, 633 qui tam suits were filed, an average of more than 12 cases per week. Additionally, non-intervened qui tam settlements and judgments (i.e., where private counsel represent the government without the assistance or participation of the DOJ) totaled an impressive $272 million in 2019.

The ResMed  settlement marks one of the first FCA recoveries announced in 2020 and demonstrates the continued importance of FCA enforcement.

The legal team at SFMS has significant experience litigating FCA matters, including non-intervened cases. SFMS has recovered more than $1 billion for federal and state governments in FCA litigation.  If you have any questions regarding this subject or this posting, please contact John Roberts (jroberts@sfmslaw.com) or Alec Berin (aberin@sfmslaw.com).  We can also be reached toll-free at 877-891-9880.

Shepherd, Finkelman, Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, And Pennsylvania. SFMS is an active member of International Advisory Group (iag.global), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

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