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DOJ targets med equipment manufacturer in recent AKS case

The Department of Justice recently accused a medical equipment manufacturer of violating the Anti-Kickback Statute (AKS). Whistleblowers began the claim, accusing the company of paying monetary incentives to suppliers and labs to better ensure these medical professionals used their sleep apnea equipment.

Additional claims against the company include:

  • Benefits to physicians. The company allegedly illegally provided doctors with free home sleep testing devices.
  • Perks for labs. The claims also state the manufacturer gave diagnostic labs free or below-cost positive airway pressure masks and diagnostic machines in exchange for continuing to use their products.
  • Financial incentives. The DOJ also claims the company provided interest-free loans to help suppliers purchase their equipment.

How is this a violation of federal law?

The DOJ states the healthcare company submitted claims to Medicare for federal reimbursement. As a result, it falls under these regulations. The government has argued the medical equipment manufacturer was using the alleged incentives noted above to encourage use of their products not for the best interest of the patient but instead for financial gain.

As noted above, this case was catalyzed by a whistleblower claim. Whistleblower claims are not uncommon in these situations. The government encourages those with information within these facilities to come forward in exchange for financial gain if the case proves successful.

How did the case progress?

Ultimately, the government was able to gather enough evidence to support the AKS violation claim. As a result, not only did the government receive a renumeration from the manufacturer, but the whistleblowers also received over $6 million in settlement proceeds.