What’s New/Significant

ResMed Corp., a medical equipment manufacturer, agreed Jan. 15 2020, to pay $37.5 million to resolve alleged False Claims Act violations and alleged kickbacks by i) providing companies with free telephone call center services and other free patient outreach services that enabled them to order resupplies for their patients with sleep apnea; ii) providing sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines; iii) arranging for, and fully guaranteeing the payments due on, interest-free loans that equipment suppliers acquired from third-party financial institutions for the purchase of ResMed equipment; and iv) providing non-sleep specialist physicians free home sleep-testing devices referred to as “ApneaLink.”

Terms of Settlement

This civil settlement resolves allegations stemming from five qui tam lawsuits originally brought by whistleblowers, who will collectively receive $6.2 million from the settlement. In addition to the $37.5 million payment to the federal government, ResMed will pay an additional $2 million to various states.

Contemporaneous with the civil settlement, ResMed entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. The CIA 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.