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Arriva Medical Will Pay $160M in Medicare Fraud Lawsuit

— August 6, 2021

Arriva waived co-pays and submitted false Medicare claims, according to investigators.

Greg Goodman, 59, took a call center job at a medical supply company, Arriva Medical LLC, years ago and has since retired.  Goodman began his employment amid the recession, and even though he had little experience, knew right way the fact that the company was pushing customer service representatives to sell glucose meters and waive co-pays wasn’t normal.

“It did not feel right,” Goodman said. “It was too hard of a sell, too much beat into our heads about the limited things we could or couldn’t do.  It just didn’t feel right.  So, I did a little bit of reading.”

Goodman would become a central figure in the whistleblower lawsuit against the now defunct Arriva Medical, one point the largest Medicare mail-order diabetic testing supplier, and its parent company, Alere Inc., is set to pay $160 million to settle fraud allegations.

Arriva Medical Will Pay $160M in Medicare Fraud Lawsuit
Photo by Tara Winstead from Pexels

“Paying illegal inducements to Medicare beneficiaries in the form of free items and routine copayment waivers can result in overutilization and waste taxpayer funds,” said Acting Assistant Attorney General Brian M. Boynton for the Department of Justice’s (DOJ) Civil Division. “We will continue to protect the integrity of the Medicare program by pursuing fraudulent claims arising from violations of the Anti-Kickback Statute or other applicable reimbursement requirements.”

While waiving co-pays to use their services seems like a good thing, this can only be done legally when true financial need is established.

“Now that sounds like that’s a nice thing.  These are retired people over 65 and some of them have limited means,” Jerry Martin, a former U.S. attorney and Goodman’s attorney said. “Well, you’re only supposed to waive the copay in very limited circumstances where you can establish that there’s an actual financial need, you can’t just have a blanket policy of waiving copays.  Medicare wants its beneficiaries to have some skin in the game.”

The investigation showed Arriva Medical also failed to send invoices to beneficiaries, send collection letters or make phone calls to collect co-pays when they were due, too, according to the DOJ.  The company allegedly waived these payments when customers complained that it marketed its supplies as “free or available at no cost.”  It even filed false claims on behalf of deceased individuals.

“Medicare is a publicly funded program, and less collected for its services means less goes back into the pot to spread around.  Medicare beneficiaries are normally only eligible to seek reimbursement for a new meter once every five years,” the U.S. Attorney’s office said. “Arriva’s actions added up to creating an unfair advantage against companies that play by the rules.”

Acting U.S. Attorney Mary Jane Stewart added, “The False Claims Act and related statutes exist to ensure companies do not benefit from unfair competition by gaining an illegal advantage over competitors.  When companies engage in such practice, they can expect to be held accountable for their actions.”

Arriva’s founders, David Wallace and Timothy Stocksdale, previously paid $1 million to resolve allegations that they were involved in the kickback scheme.  Ted Albin and his company, Grapevine Billing and Consulting Services, Inc., are still under investigation.   Goodman will receive $28.5 million for his role.

“It actually feels surreal still,” Goodman said. “As incredible as you might think it feels, it probably feels even better, it’s just incredible and a blessing.  How it’s ended up, it’s been well worthwhile, but by far the hardest part of this case is just the length of time, the ups and downs of emotional swings.  It was all over the place.”


Prosecutors reach $160M whistleblower settlement with mail-order diabetic testing company

Mail-Order Diabetic Testing Supplier and Parent Company Agree to Pay $160 Million to Resolve Alleged False Claims to Medicare

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