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Diabetic Testing Company Must Pay $160 Million to Settle Whistleblower Lawsuit

Arriva Medical, a company that specialists in mail-order diabetic testing services, recently reached an agreement with prosecutors to pay $160 million to settle a whistleblower lawsuit.

The False Claims Act case was initiated by a whistleblower named Greg Goldman, who worked at a call center in Antioch.

Case background

Goodman started working in the call center in 2013, after years of serving as an account executive in investment firms. He wanted to give the healthcare industry a shot after the 2008 recession.

When he got started, he felt the company was using some unusual and shady practices to sell its glucose meters. The company would push its customer service representatives at call centers to waive co-pays and push those meters hard. Goodman said it “didn’t feel right,” and that they were delivering too hard of a sell.

According to the lawsuit, the company would advertise its glucose meters as being free to patients during intake calls and give them to beneficiaries at no cost, but would still bill Medicare for the service. The company would also waive copays to encourage Medicare patients to use their services.

Copays are only allowed to be waived in limited circumstances when there is a true financial need, but Arriva was basically using them as a marketing tool. Its blanket policy of waiving copays was a violation of healthcare ethics rules and it defrauded Medicare. This scheme also gave Arriva an unfair advantage over competitors that were following the rules.

Arriva is now defunct, in part because of this scheme, and its founders had to pay significant penalties to resolve allegations they participated in a kickback scheme. Goodman earned $28.5 million for playing a role in the lawsuit over the course of its eight years of investigations and prosecution.

To learn more about the steps you should take if you become aware of healthcare fraud, contact a trusted whistleblower lawyer at Kardell Law Group.

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