Posted by Romelia Argudo.
One of the biggest setbacks for a company can be when they are hit with a lawsuit – especially one that involves settlements for 34 million dollars. Philips Respironics, Inc, known for their sleeping masks given to treat sleep apnea patients, was hit with a 34.8 lawsuit for violating the Anti-Kickback Statute. This “prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program Medicare. . .” In essence, this statute prohibits any exchange of value to reward the referral of healthcare program business. The United States alleged that Phillips Respironics, Inc. violated this law through means that allowed them to make a bigger profit.
The company sold their machinery to durable medical equipment (DME) suppliers. The deal was if DME suppliers would purchase Philip Respironic’s products, they would get free customer support for their clients to cover any of their needs. But instead, DMEs were charged monthly fees in accordance to the amount of patients that were using products from Philip Respironic’s competitors. So overall, these suppliers were being charged with fees if they supplied patients with products that were competitors of this company. This would drive DME suppliers to purchase more products from this specific sleep mask manufacturer.
US Attorney Bill Nettles says that “this office has made a substantial commitment to combatting fraud.” Not only has this move influence a consumers decision in what to purchase, but other companies as well. This was clear to Dr. Gibran Ameer who brought attention to this case. As a DME supplier worker, he noticed this and is now considered a “whistleblower” for informing US Attorneys of this wrong doing. As a result, Ameer is being rewarded $5.38 million for this moral act.
Special Agent Derrick L. Jackson of the Department of Health and Human Services says that “we will continue to investigate such business arrangements, which threaten the integrity of federal healthcare programs.”
In doing so, this encourages businesses to act as business ethically as much as they can as well as following business law.
Romelia is a marketing major at the Stillman School of Business, Seton Hall University.