NEW YORK (360Dx) – Two former executives of Arriva Medical have agreed to pay $1 million to settle allegations that they had engaged in diabetic testing supply fraud in violation of the False Claims Act.
Don Cochran, US Attorney for the Middle District of Tennessee, announced Wednesday that Arriva cofounders David Wallace and Timothy Stocksdale will pay $500,000 each to settle claims by the US Department of Justice that they had caused the company to submit false claims to Medicare and to bill Medicare for medically unnecessary home blood glucose meters.
In addition to cofounding the company, Wallace and Stocksdale remained as executives following its sale to Alere in November 2011, with Wallace serving as president and Stocksdale serving as vice president through August 30, 2013.
DOJ alleged that during that time period the two were involved in kickbacks paid to Medicare beneficiaries through free or no-cost home blood glucose monitors, or waived or uncollected copayments, and in billing Medicare for unnecessary monitors.
Separate from the case against Wallace and Stocksdale, DOJ entered a False Claims Act case against Arriva and Alere on February 8, 2019 alleging that Arriva, with oversight and approval of Alere, offered free upgrades of medically unnecessary glucometers to Medicare beneficiaries, and then billed Medicare for the equipment. Arriva, based in Coral Springs, Florida, is also alleged to have "made no meaningful effort" to collect copayments from the beneficiaries for the glucometers or diabetic testing supplies subsequently purchased from Arriva for use with the glucometers.
Arriva and Alere were acquired by Abbott in late 2017.