Arriva Medical in ‘midst’ of ALJ appeal

Acquisition by Abbott Laboratories moves forward
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Friday, April 21, 2017

CORAL SPRINGS, Fla. – Arriva Medical, a provider of diabetes testing supplies, remains confident that it will get its Medicare billing status reinstated.

That may be a big reason why Abbott Laboratories last week finally agreed to buy Alere, Arriva Medical’s parent company, after months of court battles.

“Arriva is continuing to support its patients while working through the process of resolving the revocation of the billing number,” a spokesperson for parent company Alere told HME News in an email. “Arriva is in the midst of the administrative appeals process, with an appeal pending before an administrative law judge.”

Arriva Medical is not currently listed as one of the 11 mail-order contract suppliers for diabetes supplies on Medicare’s online supplier directory.

In the meantime, in March, the U.S. District Court for the District of Columbia denied Arriva Medical’s motion for interim relief and denied CMS’s motion to dismiss Arriva Medical’s complaint. Arriva Medical is considering an appeal.

In both cases, Arriva Medical argues that the administrative review process must be completed before CMS can revoke its billing status.

CMS revoked Arriva Medical’s billing status in 2016, alleging the provider submitted 211 claims for deceased patients between April 15, 2011, and April 25, 2016. Arriva Medical says the problem was with the agency’s HIPAA Eligibility Tracking System—it crashed due to the nearly 5.8 million claims the provider submitted during that time period.

Arriva Medical’s troubles were part of the reason why Abbott has agreed to buy Alere, but at a lower price than previously offered. Under the new terms, Abbott will pay $51 per common share to acquire Alere, for a new expected equity value of approximately $5.3 billion, reduced from $5.8 billion.

Abbott had previously filed a complaint in the Delaware Court of Chancery, asking a judge to terminate the deal, saying Alere was no longer the same company it tried to buy. Alere sued Abbott in the same court, asking a judge to enforce the deal.