ResMed, gov’t finalize settlement

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Wednesday, January 15, 2020

WASHINGTON – ResMed has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other healthcare providers, the Department of Justice announced today.

David Pendarvis, the company’s chief administrative officer and global general counsel, said in a statement that the settlement was in the best interest of its customers, investors, employees and patients.

“ResMed has not violated any laws,” he stated. “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.”

ResMed first announced the broad terms of the settlement in its earnings statement for the fourth quarter of fiscal year 2019, back in July.

Per the settlement, ResMed entered into a corporate integrity agreement with the OIG that requires, among other things, that ResMed implement additional controls around its product pricing and sales, and that ResMed conduct internal and external monitoring of its arrangements with referral sources, according to the DOJ.

“This settlement does not impact our ability to sell products in the United States, nor does it impact the reimbursement of our products by federal health programs,” Pendarvis stated. “We have always acted in good faith with patients and our valued customers, and we do not expect this to impact our relationship with either.”

Also as part of the settlement, ResMed will pay more than $2 million to various states, according to Phillips & Cohen, a law firm that represented whistleblower Thomas Baker, a former sales rep for the company.

The settlement resolves five lawsuits originally brought by whistleblowers under the qui tam provisions of the False Claims. The whistleblowers will receive a roughly $6.2 million share of the settlement.

The settlement, according to the DOJ, “resolves allegations 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 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 referred to as ApneaLink.”

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