Medical equipment company to pay $37.5M for alleged kickback scheme

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SAN DIEGO — San Diego-based medical equipment manufacturer ResMed Corp. has agreed to pay more than $37.5 million to resolve allegations that it paid kickbacks to suppliers, sleep labs and other health care providers in exchange for referrals and prescriptions for its products, the Department of Justice announced Wednesday.

The government accused ResMed of violating the Anti-Kickback Statute of the False Claims Act by providing free or below-cost medical equipment to companies in several states. Court documents state that ResMed’s products — which treat sleep apnea and other sleep disorders — were provided to companies that in some cases began writing prescriptions to their patients entirely for ResMed equipment.

Prosecutors say some examples of ResMed kickbacks included free home sleep testing devices, free or below-cost positive airway pressure masks and diagnostic machines, and free telephone call center and patient outreach services that allowed the companies to order resupplies for sleep apnea patients.

The settlement agreement resolves five lawsuits filed by whistleblowers, who will collectively receive around $6.2 million out of the total settlement.

“Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system,” said Assistant Attorney General Jody Hunt. “When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on unlawful payments from equipment manufacturers.”

In a statement sent to FOX 5, ResMed said, “ResMed has not violated any laws; its business practices are conducted in full accordance with U.S. laws and regulations. That said, we are pleased to put this matter behind us and avoid the expense, inconvenience, and distraction it would cause to gain the favorable outcome we deserve.”

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