Dive Brief:
- Philips has reached a second settlement in a week with the U.S. Department of Justice over alleged violations of the False Claims Act.
- Across the two settlements, Philips has agreed to pay more than $28 million to resolve cases that involve failure to recertify adaptations to a mobile patient monitoring device, and providing physician prescription data as a kickback to a provider of durable medical equipment.
- Philips, which previously set aside $30 million to settle the two cases and a third matter, said the agreements will free it from the time, resources and expense of litigating the claims.
Dive Insight:
The kickbacks settlement is the larger of the two agreements, with Philips paying more than $24 million to resolve the case. According to the DOJ, Respironics, a Philips’ business, provided kickbacks to many of its durable medical equipment (DME) customers. Respironics allegedly purchased, “at a significant cost to itself,” data on the prescribing decisions of U.S. physicians and gave the information to DME suppliers.
“Respironics knew that the data was of incredible value to the DME suppliers, who could use the data to identify physicians in their area to target for sales,” the DOJ wrote. “Respironics’ purpose, when giving the data to the DME Suppliers, was to induce the DME Suppliers to recommend Respironics’ At-Issue products to patients and physicians — and the DME Suppliers knew that this was Respironics’ purpose.”
The DOJ alleges Respironics engaged in the practice from 2016 to 2020. Respironics settled another kickback case in 2016, paying the government $34.8 million and signing a corporate integrity agreement in which it vowed to stop kickbacks to DME suppliers. According to the DOJ, the use of data as a kickback began around the time Respironics signed the integrity agreement.
Philips has agreed to pay the U.S. $22.6 million to settle the case. Other aspects of the settlement bring the total up above $24 million, a sum that Philips thinks is worth paying to put the matter behind it. In an emailed statement, Philips spokesman Steve Klink said the company is “not acknowledging any alleged facts, liability, or wrongdoing” in the kickback claim.
“Settling this claim allows us to put this matter behind us and maintain our focus on our customers and the patients they serve,” David Ferguson, business leader for Philips Respironics, said in an emailed statement. “We maintain a comprehensive compliance program and we will work with the relevant authorities to satisfy the terms of the settlement. This agreement should have no impact on our customers or the patients they serve.”
Earlier this week, Philips reached a settlement with the Justice Department relating to the sale of the MP2 mobile patient monitoring device to the U.S. military. Philips sold MP2 to the U.S. Air Force, U.S. Army, U.S. Navy and the Defense Logistics Agency from 2012 to 2018. By its own admission, Philips did not adequately notify the relevant military testing facilities to determine whether its device modifications required retesting for certification after receiving initial airworthiness and safe-to-fly certifications from the Army in 2008 and Air Force in 2011.
