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Alere and Former Diabetic Testing Subsidiary Settle False Claims Allegations for $160M

NEW YORK – The US Department of Justice announced on Monday that Arriva Medical and its parent company Alere have agreed to pay $160 million to settle allegations of false claims.

From 2010 to 2016, mail-order diabetic test supplier Arriva allegedly paid kickbacks to Medicare beneficiaries by providing free glucometers and routinely waiving copayments for meters and supplies. Arriva was accused of advertising free glucometers and offering a "no cost guarantee" that the supplies would be free if Medicare denied the payments.

The firm, which ended operations in 2017, also allegedly provided existing customers free additional meters to encourage them to reorder testing supplies, the DOJ said in a statement.

In addition, the company allegedly didn't send invoices or collection letters to beneficiaries to obtain copays and systematically waived small dollar copays without telling patients they needed to pay or when patients complained that the supplies had been advertised for free. Other copays were waived after sending only three invoices and making no other collection efforts, the DOJ said.

The agency also accused Arriva of providing all new patients with glucometers and billing Medicare without considering their eligibility for one, with Alere's approval. Beneficiaries are only eligible for a new meter once every five years. The company allegedly repeatedly billed Medicare for medically unnecessary meters when the company had previously billed Medicare for meters within that five-year window.

Lastly, DOJ accused Arriva of submitting false claims to Medicare for patients who had died. Arriva's Medicare billing privileges were revoked in 2016 for billing the agency for patients who had died, although Alere said the issue was due to errors from Medicare system flaws.

Abbott acquired Alere in 2017 for $5.3 billion.

Arriva's founders previously paid $1 million to resolve allegations of kickbacks. The DOJ joined the lawsuit in 2019 and added Ted Albin, a reimbursement consultant for Arriva, as a defendant in the case. Albin's litigation is still ongoing.