Mail Order Diabetes Testing Company Settles FCA Claims with DOJ

Yesterday, the Department of Justice announced that a $160 million settlement was reached in the Middle District of Tennessee between Arriva Medical LLC and the government, who had intervened on behalf of Gregory Goodman. The settlement marks the end of a lawsuit that accused Arriva and their parent company Alere Inc. of violating the False Claims Act. 

Arriva, the release said, was a mail-order diabetic testing supply company. In 2013, former call center employee Gregory Goodman filed a lawsuit under the whistleblower provision of the False Claims Act because he believed that his employer was falsely claiming medical benefits for deceased patients and people who did not require or were not eligible for the medical equipment that was being paid for by Medicare. The release said that the company’s Medicare supplier number was revoked in connection with these actions in 2016.

According to the settlement, between 2010 and 2016 Arriva “knowingly and willfully offered or paid kickbacks to Medicare beneficiaries who were Arriva customers in the form of “free” or “no cost” home blood glucose monitors (glucometers or meters), and the routine waiver or non-collection of beneficiary copayment obligations, and then submitted or caused to be submitted false claims on behalf of those Arriva customers to Medicare that were tainted by those unlawful kickbacks”

Under the terms of the settlement, $160 million will be paid to the government, almost half of which is restitution. Once the defendant pays the government, Goodman will receive $28,548 for his role in the proceedings. No parties are forced to admit any guilt and once all stipulations are satisfied, the matter will be settled and no more legal action will be taken against Arriva, the agreement said.

Mary Jane Stewart, the acting U.S. Attorney for the Middle District of Tennessee, said in a statement that “The False Claims Act and related statutes exist to protect the public fisc and to ensure companies do not benefit from unfair competition by gaining an illegal advantage over competitors … When companies engage in such practice, they can expect to be held accountable for their actions.”

In the underlying lawsuit, Goodman was represented by Barrett Johnston Martin & Garrison and Robbins Geller Rudman & Dowd. The defendant was represented by Kirkland & Ellis, Bass, Berry & Sims, and Bradley Arant Boult Cummings LLP