On February 19, 2019, the Department of Justice (DOJ) announced that it had intervened in a False Claims Act (FCA) whistleblower suit filed against Arriva Medical LLC (Arriva) and its parent that allegedly involves the submission of false claims for medically unnecessary glucometers, and alleged kickbacks to Medicare beneficiaries in the form of free glucometers and copayment waivers. This intervention is particularly noteworthy for the fact that in addition to joining the suit, DOJ announced that it was adding a reimbursement consultant used by Arriva as a defendant to the FCA suit.

According to DOJ, Arriva formerly operated a mail-order diabetic testing supply company, and as part of its business required new customers to obtain a new glucometer whether or not they already had a functioning glucometer. DOJ alleges that this resulted in the routine submission of false claims to Medicare for medically unnecessary glucometers. DOJ further alleges that “Arriva made no meaningful effort to collect copayments from beneficiaries for the meters or diabetic testing supplies” in violation of the Anti-Kickback Statute (AKS), and that Arriva also provided free upgrades of glucometers to beneficiaries in alleged violation of the AKS.

As referenced above, DOJ’s naming of the reimbursement consultant as an additional defendant in an FCA case is unusual. This may portend heightened scrutiny of the role that outside consultants can play in billing and reimbursement practices by health care providers. Providers would therefore be well-advised to implement and review compliance safeguards on arrangements with outside consultants in accordance with federal fraud and abuse laws.