Philips settles allegations of induced referrals 

PITTSBURGH – Philips RS North America, formerly known as Respironics, has agreed to pay $1.28 million to settle allegations that it unlawfully induced referrals for its equipment in violation of the False Claims Act and Anti-Kickback Statute, the Department of Justice has announced. 

The government specifically alleged that, between December 2015 and December 2016, Respironics helped a DME supplier procure a twelve-month, interest-free loan that was fully guaranteed by Respironics. Under the arrangement, Respironics bore the full financial risk of non-collection on the loan in the event the DME supplier defaulted on the loan. 

The government contended this arrangement violated the Anti-Kickback Statute and, in turn, the False Claims Act. 

In addition to the civil settlement, Respironics entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services and the Office of Inspector General. The CIA requires Respironics to implement and maintain a robust compliance program that includes, among other things, reviewing arrangements with referral sources and monitoring the company’s sales force. It also requires Respironics to retain an independent monitor, selected by the OIG, to assess the effectiveness of its compliance systems. 

This civil matter arose from an action brought under the whistleblower provisions of the False Claims Act. Pursuant to that act and the settlement agreement, the whistleblower will share in the financial recovery. 

The claims asserted against Respironics are allegations only. There was no determination or admission of liability.