Philips settles kickback allegations 

SAN DIEGO – Philips Respironics has paid almost $2.5 million to resolve allegations that it violated the False Claims Act by giving kickbacks to sleep laboratories, the U.S. Attorney’s Office for the Southern District of California has announced. 

The settlement resolves allegations that, from 2016 through 2021, Philips Respironics provided sleep labs with free masks used to treat and diagnose sleep-related respiratory disorders to induce physicians at the labs to write referrals or prescriptions for Respironics-brand masks that suppliers would then fill and bill to federal health care programs. 

“When kickbacks are used as bribes, patients suffer,” said U.S. Attorney Tara McGrath. “Companies like Phillips Respironics will be held accountable if they undermine our trust in the medical system and shift medical advice from a patient’s best interest to lining their own pockets.” 

The claims resolved by the settlement are allegations only, and there has been no determination of liability, according to the DOJ. 

The Anti-Kickback Statute prohibits paying money or giving goods to induce referrals for medical services or items covered by a federal health care program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act. 

This settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the Southern District of California; the Defense Criminal Investigative Service; the Department of Health and Human Services, Office of Inspector General and Office of Counsel to the Inspector General; the Defense Health Agency Office of General Counsel; the Civil Division of the DOJ; and the National Association of Medicaid Fraud Control Units. 

In 2022, Philips Respironics agreed to pay $1.28 million to settle allegations that, between December 2015 and December 2016, it helped a DME supplier procure a 12-month, interest-free loan that was fully guaranteed by the company. 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.   

Also in 2022, the company agreed to pay more than $24 million to resolves allegations that it caused DME suppliers to submit claims for ventilators, oxygen concentrators, CPAP and BiPAP machines, and other respiratory related medical equipment that were false because it provided illegal inducements to the suppliers. Respironics allegedly gave suppliers prescribing data free of charge that could assist in their marketing efforts to physicians. 

In 2016, the company agreed to pay $34.8 million to resolve allegations that it waved the per-patient per-month fee for its medSage automated resupply services for DME providers that bought the company’s masks.