Chicago – Attorney General Kwame Raoul today announced his office joined with other states and the federal government to reach an agreement with Philips RS North America LLC – formerly known as Respironics Inc. – to resolve allegations the medical equipment manufacturer misled federal health care programs by paying kickbacks to their suppliers.
Under the settlement, Illinois has received $751,955.06.
“Our investigation found Respironics successfully increased product sales by illegally providing valuable data to their suppliers,” Raoul said. “I will continue to partner with federal agencies and other attorneys general to hold companies accountable who seek to manipulate the system for their own financial gain.”
This settlement arises from a civil action originally filed in October of 2019 in the United States District Court for the District of South Carolina under the federal False Claims Act and various state false claims statutes. The settlement resolves allegations that from November 1, 2014 through April 30, 2020, the Pennsylvania-based company caused durable medical equipment suppliers to submit false claims to the Medicaid program for ventilators, oxygen concentrators, CPA and BiPAP machines and other respiratory-related medical equipment. The investigation found Respironics provided highly-valuable physician prescribing data to suppliers to incentivize them to purchase Respironics products in violation of federal and state law.
Respironics, Inc. produces durable medical equipment for customers, the vast majority of whom supply durable medical equipment to physicians. Respironics has agreed to pay over $24 million to resolve the allegations that affected Medicare, Medicaid and TRICARE.
Illinois State Police (ISP) Medicaid Fraud Control Bureau assisted in the investigation.
“ISP will fully investigate companies that defraud the public and use taxpayer dollars for their own gain,” said ISP Director Brendan F. Kelly.
A National Association of Medicaid Fraud Control Units (NAMFCU) Team participated in the investigation and conducted the settlement negotiations with Respironics on behalf of the states. In addition to Illinois, the team included representatives from the attorneys general of Delaware, Florida, Indiana, New York, Pennsylvania, Tennessee and Washington.
Bureau Chief Heather D’Orazio handled the case for Raoul’s Medicaid Fraud Bureau.
The Medicaid Fraud Control Bureau under the Illinois State Police receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $8,007,764 for Federal fiscal year (FFY) 2023. The remaining 25 percent, totaling $2,669,252 for FFY 2023, is funded by the State of Illinois.