On Monday, August 2, 2021, the DOJ announced that Arriva Medical LLC (“Arriva”), a mail-order diabetic testing supplier, and its parent, Alere Inc. (“Alere”) have agreed to pay $160 million to resolve allegations that they violated the False Claims Act.
According to the July 2021 Settlement Agreement:
-From 2009 until December 2017, Arriva was a Florida-based mail-order supplier of diabetic testing supplies to, amongst others, beneficiaries of the Medicare program. Arriva was founded in 2009 by David Wallace and Timothy Stocksdale, who, along with other investors, owned Arriva until November 2011. From 2009 until the sale of Arriva to Alere in November 2011, Wallace and Stocksdale operated and managed Arriva. Starting in November 2011, Arriva was a subsidiary of Alere, which oversaw and controlled Arriva’s operations during this period. (Arriva and Alere are collectively referred to as the “Arriva Defendants”).
-On August 1, 2013, Relator filed a qui tam action against the Arriva Defendants in
the United States District Court for the District of Middle District of Tennessee captioned United
States ex rel. Goodman v. Arriva Medical, LLC, et al., No. 3:13-cv-00760, pursuant to the qui tam
provisions of the False Claims Act, 31 U.S.C. § 3730(b) (the “Civil Action”). The United States
intervened in part in the Civil Action on February 8, 2019 and asserted additional claims.
-The United States contends that the Arriva Defendants knowingly submitted or caused to be
submitted false claims for payment to the Medicare Program, Title XVIII of the Social Security Act, 42
U.S.C. §§ 1395-1395lll (“Medicare”).
-From April 1, 2010 through December 31, 2016, the United States contends that the Arriva Defendants, in violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a7b(b), (1) knowingly and willfully offered or paid kickbacks to Medicare beneficiaries who were Arriva customers in the form of (i) “free” or “no cost” home blood glucose monitors (glucometers or meters), and (ii) the routine waiver or non-collection of beneficiary copayment obligations, and then (2) submitted or caused to be submitted false claims on behalf of those Arriva customers to Medicare that were tainted by those unlawful kickbacks. The false claims included initially tainted claims for payment submitted on behalf of Arriva customers to Medicare between April 1, 2010 and December 31, 2016 for diabetic testing supplies billed under Healthcare Common Procedure Coding System codes E0607, A4253, A4256, A4258, and A4259, as well as subsequently tainted claims for diabetic testing supplies submitted to Medicare on behalf of those same Arriva customers as much as one year after those Medicare beneficiaries became tainted by the offer or payment of kickbacks to them. The United States contends that these claims were false because they resulted from and were tainted by the kickbacks described above and in the Amended Complaint. See 42 U.S.C. § 1320a-7b(g)
-From March 1, 2009 when Arriva opened to December 31, 2016, the United States contends that the Arriva Defendants submitted or caused to be submitted false Arriva claims to Medicare for new glucometers for beneficiaries whom the Arriva Defendants knew had received a glucometer paid for by Medicare within the past five years, even though the new glucometers were for that reason not covered by Medicare under 42 U.S.C. § 1395m(a)(7)(C)(ii) and 42 C.F.R. § 414.210(f)(1).
-From April 15, 2011 to April 25, 2016, the United States contends that Arriva submitted or caused to be submitted 227 false claims of Arriva to Medicare for 211 beneficiaries who had been deceased for more than fourteen days, as of Arriva’s reported dates of service for the claims.
-This Settlement Agreement is neither an admission of liability by the Arriva
Defendants nor a concession by the United States that its claims are not well founded. The Arriva
Defendants deny the United States’ allegations herein and the Relator’s allegations in the
Civil Action.
The claims resolved by the settlement are allegations only and there has been no determination of liability.