DME Supplier Pays $37.5M to Settle AKS-Based FCA Claims Across Five Qui Tam Suits

DOJ has announced that ResMed Corp., a manufacturer of durable medical equipment (DME) that treats sleep apnea and other chronic respiratory diseases, has agreed to pay $37.5 million to settle claims under the False Claims Act based on allegations that ResMed paid kickbacks to DME suppliers, healthcare providers, and other entities in violation of the federal Anti-Kickback Statute.  In particular, DOJ alleged that ResMed “(a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea, (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines, (c) arranged for, and fully guaranteed the payments due on, interest-free loans that DME suppliers acquired from third-party financial institutions for the purchase of ResMed equipment, and (d) provided non-sleep specialist physicians free home sleep testing devices.”

The settlement will also dispose of five separate qui tam suits that were filed around the country, four of which have been unsealed.  In addition to those allegations described above, the relators also allege that ResMed encouraged primary care doctors and other non-sleep specialist physicians to perform and bill for home sleep tests using ResMed products, and to prescribe ResMed products for Medicare patients who purportedly suffered from sleep apnea even though the sleep tests and products were non-reimbursable because they were not prescribed by sleep specialist physicians as required by Medicare.

ResMed reportedly also has agreed to enter into a Corporate Integrity Agreement, the details of which are not yet public.