Maryland Attorney General Anthony G. Brown has announced that Maryland has joined other states and the federal government in reaching an agreement with durable medical equipment (DME) manufacturer, Philips RS North America LLC, formerly known as Respironics Inc. The settlement resolves allegations that the company misled federal health care programs by paying kickbacks to DME suppliers, resulting in tainted claims for Medicare, Medicaid, and TRICARE totaling over $24 million. Under the agreement, the state of Maryland received $139,772.07.
The allegations relate to claims for ventilators, oxygen concentrators, CPAP, and BiPAP machines and other respiratory-related medical equipment that were submitted to the Medicaid program from November 1, 2014, through April 30, 2020. The claims were tainted by unlawful remuneration in the form of physician prescribing data provided free of charge by Respironics to the DME suppliers, knowing that this data may be of significant value to them in their own marketing efforts.
The settlement resulted from a qui tam action filed in October 2019, which was amended in November of the same year, in the United States District Court for the District of South Carolina under the federal False Claims Act and various state false claims statutes.
Attorney General Brown stated that “Submitting false claims for reimbursement to the State is fraud, and unlawfully siphons money away from critical government programs and operations that serve the needs of Maryland residents. We’re pleased that under this settlement, programs that serve healthcare needs, particularly of vulnerable Marylanders, will receive their money back.” He thanked the Maryland Medicaid Fraud Control Unit and Assistant Attorney General Jawaria Gilani for their work on the case.
The Maryland Medicaid Fraud Control Unit, which receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $4,908,456 for Federal fiscal year (FY) 2023, funded the remaining 25 percent, totaling $1,636,148 for FY 2023.
The settlement serves as a reminder that companies that defraud government programs face serious consequences. The False Claims Act, which permits private parties to sue on behalf of the government, encourages whistleblowers to come forward with knowledge of fraud against government programs. The government can recover up to three times the amount of damages it has sustained, plus civil penalties of up to $23,331 for each false claim submitted.
Respironics’ settlement is the latest in a string of settlements that the government has reached with companies accused of defrauding government programs. In September 2022, the U.S. Department of Justice announced that it had reached a $114 million settlement with a group of healthcare companies accused of submitting false claims for medical equipment and supplies. This settlement underscores the government’s commitment to combat healthcare fraud and abuse.
In conclusion, the settlement with Respironics underscores the importance of holding companies accountable for fraudulent practices that harm government programs, and Maryland’s recovery serves as a reminder that whistleblowers can play a crucial role in uncovering fraud against the government.