Brian Buntz

March 24, 2016

2 Min Read
Philips to Pay $35 Million to Settle Medicare Fraud Charges

The Respironics division of Philips has agreed to pay $34.8 million to settle allegations that it offered kickbacks to companies that bought its sleep apnea masks. 


Brian Buntz


Philips' Murrysville, PA-based Respironics division was accused by the Department of Justice of offering free call center services to suppliers of durable equipment to sway them to buy their sleep apnea masks. The company has agreed to pay $34.8 million to resolve those charges without admitting guilt. The fine would be one of the larger fines levied on medical device companies in 2015 or 2016 but would be significantly less than the $646 million that Olympus stands to pay over endoscope kickbacks.


In a statement, principal deputy assistant attorney general Benjamin C. Mizer stated that kickbacks threatened public confidence in the U.S. healthcare system. "Americans deserve to know that when they are prescribed a device to treat a serious healthcare problem, the supplier's judgment has not been compromised by illegal payments from equipment manufacturers.


Respironics was accused of offering DME companies with call center services to help their clients satisfy patients' resupply needs at no cost, provided their clients' patients received Respironics masks. If the companies used competitors' products, they would have to pay a monthly fee according to the number of patients who used the masks, according to the U.S. government, which claimed the conduct occurred from April 2012 and to November 2015. The arrangement was said to be part of Respironics' "Fit for Life" program. 


The company described that program as a "resupply solution [...] designed to acknowledge [current] operational and economic challenges by offering providers an efficient way to serve patients through a lifetime of care, while also effectively coordinating [...] payer and industry requirements."


The company advertised its "EncoreResupply and medSage services" helped clients efficiently "identify and contact patients who are eligible to receive a new mask" as part of an "automated outreach program."


Of the $34.8 million total, approximately $34.14 million will go the federal government and approximately $660,000 to various state governments according to their Medicaid participation. 


The settlement was the result of a lawsuit originally filed by Gibran Ameer, who will win $5.38 million as part of the civil settlement. 


Learn more about cutting-edge medical devices at BIOMEDevice Boston, April 13-14, 2016.

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