Sleep apnea mask maker Respironics Inc. has agreed to pay $34.8 million for resolving the issue of providing alleged kickbacks to suppliers of medical equipment, the Department of Justice announced on Wednesday.

The Murrysville-based company is said to pay about $34.14 million to the federal government and another $660,000 to different states, depending on the extent of Medicaid program involvement.

The Dirt

The U.S. accuses Respironics of violating the Anti-Kickback Statute and the False Claims Act by providing medical equipment suppliers with free call center services so it could meet the demands of its consumers.

Here's the catch: medical equipment suppliers may avail of the free call center services if their clients will use sleep apnea masks manufactured by Respironics. If their customers use products from Respironics' competitors, then the suppliers have to pay a monthly fee based on the number of Respironics non-users.

The government purported that the said practice has been happening from April 2012 to November 2015.

The Law

The Anti-Kickback Statute, which the government has accused Respironics of breaking, prohibits the conscious and willful payment to induce the referral of services or products that are paid by federal healthcare programs such as Medicaid and Medicare.

Principal Deputy Assistant Attorney General Benjamin Mizer says giving whatever type of illegal remuneration to boost patient referrals endangers the confidence of the public in the healthcare sector.

He adds that Americans deserve to be informed that when they are being recommended a service to treat a life-threatening condition, the supplier's judgement has not been clouded by illegal transactions.

Battle Against Healthcare Fraud

The lawsuit serves as a response to a lawsuit initially brought up by Dr. Gibran Ameer, who has worked for various medical equipment suppliers. The said lawsuit was filed under the qui tam provisions of the False Claims Act, which allows private individuals with knowledge of fraud to file a lawsuit in behalf of the United States.

Because of the civil settlement announced, Ameer will receive $5.38 million.

"Medical equipment manufacturers that boost profits by providing kickbacks to suppliers will be held accountable for their improper conduct," says Derrick Jackson of the Department of Health and Human Services. He adds that the team will persist to investigate such business practices that imperil the integrity of the federal healthcare programs.

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