The U.S. Department of Justice has joined a six-year-old lawsuit against companies bought by Abbott Laboratories in which they're accused of submitting false Medicare claims for unnecessary devices for diabetic patients and paying kickbacks to the patients.
The lawsuit alleges Florida-based mail-order diabetic testing supply company Arriva Medical and parent Alere, a Massachusetts-based medical device firm that acquired Arriva in 2011, required all new customers to receive "free upgrades" of glucometers and then submitted false claims to Medicare for medically unnecessary meters.
The lawsuit says Arriva violated the Anti-Kickback Statute by failing to make a meaningful effort to collect copayments from Medicare beneficiaries for the meters or diabetic testing supplies subsequently purchased from Arriva for use in connection with the meters.
"We will seek to hold accountable health care providers that attempt to profit by providing illegal inducements and by billing for unnecessary items," said Assistant Attorney General Jody Hunt for the Department of Justice's Civil Division. "We will continue to take appropriate legal measures to protect Medicare funds and to ensure a fiscally sound program that can serve all of our senior citizens."
The lawsuit was initially filed in 2013 under the whistleblower provisions of the False Claims Act, which allow private parties to file suit on behalf of the United States for false claims and to receive a share of any recovery, according to a statement from the Department of Justice.
Abbott acquired Arriva and Alere in September 2017. Arriva stopped operating shortly after it was purchased by Abbott as a result of the Centers for Medicare & Medicaid Services revoking its ability to bill Medicare after the company billed the program for medical equipment for a patient who died.
An Abbott spokesperson didn't respond to requests for comment.
"U.S. government joins lawsuit against Abbott companies" was originally published by Crain's Chicago Business.