Arriva settles False Claims allegations for $160M

NASHVILLE, Tenn. – Arriva Medical and its parent company, Alere, have agreed to pay $160 million to settle allegations they violated the False Claims Act.

The federal government alleged that, from April 2010 until the end of 2016, Arriva, with Alere’s approval, paid kickbacks to Medicare beneficiaries by providing them free or no-cost glucometers and by routinely waiving, or not collecting, co-payments for meters and diabetes testing supplies. Specifically, it alleged that Arriva advertised that glucometers would be “free,” and then during intake calls offered Medicare beneficiaries a “no-cost guarantee,” under which Arriva would provide the meters at no cost if Medicare denied payment, which typically happened because the beneficiaries were not yet entitled to a new glucometer. Arriva also allegedly offered and provided existing customers “free” additional meters to induce them to reorder testing supplies from Arriva.

“Paying illegal inducements to Medicare beneficiaries in the form of free items and routine co-payment waivers can result in overutilization and waste taxpayer funds,” said Brian Boynton, acting assistant attorney general for the Justice Department’s Civil Division. “We will continue to protect the integrity of the Medicare program by pursuing fraudulent claims arising from violations of the Anti-Kickback Statute or other applicable reimbursement requirements.” 

In 2019, two former Arriva executives, David Wallace and Timothy Stocksdale, agreed to pay $500,000 to settle similar allegations.

Arriva ceased operations in December 2017 after an appeal seeking to reinstate its Medicare billing privileges failed. CMS revoked those privileges in 2016, alleging the provider submitted 211 claims for deceased patients between April 15, 2016, and April 25, 2016.

Prior to that, Arriva had been the top provider of mail-order diabetes supplies, receiving nearly $120 million in Medicare payments in 2015.

Arriva and Alere, a Waltham, Mass.-based medical device manufacturer, were acquired by Abbott Laboratories in 2017.