Philips to pay millions to settle False Claims Act allegations

Philips to pay millions to settle False Claims Act allegations

Philips will pay millions of dollars to settle allegations that the company paid bribes to suppliers in exchange for filing claims with the federal Medicare, Medicaid and Tricare health care programs for Philips devices. Philips RS North America, a Philips subsidiary formerly known as Respironics, will pay more than $24 million to the government. The fix occurred because a whistleblower came forward to report the fraud. The manufacturer is also accused of giving providers access to prescription data for free to help them market devices to doctors.

Medical product manufacturers are expected to prioritize patient care, but paying bribes is a worrying indicator that the financial bottom line has taken precedence over patient needs. Philips will pay $22.6 million to the United States and $2.13 million to various states. The company agreed to the agreement without recognizing any irregularity on its part. Along with the agreement, Philips also entered into a Corporate Integrity Agreement with the Office of the Inspector General of the Department of Health and Human Services. The agreement stipulates that the company must have a compliance program that monitors its sales for five years.

According to the Justice Department, Philips provided illegal incentives to suppliers of durable medical equipment (DME). In return, providers submitted claims for CPAP and BiPAP machines, ventilators, oxygen concentrators and other medical devices. This behavior violates the Anti-Kickback Statute, a law that prohibits paying referral fees if federal health care programs are involved. Both those who pay bribes and those who receive them can be held liable, and violators can face fines and jail time.

Philips’ misconduct was brought to light by an employee who filed a qui tam lawsuit under the False Claims Act. The law protects whistleblowers who know of a company’s wrongdoing and come forward. if a complainant’s claim results in a settlement, the complainant may receive a percentage of the award. Damages in cases brought under the False Claims Act are typically in the millions of dollars because the government can claim up to three times the loss it incurred. The employee who reported Philips will receive $4.3 million.

When a company offers bribes and engages in other corrupt behavior, it can cause the public to lose faith in a company and question whether it has the best interests of consumers in mind. This is not the first time that Philips has made headlines for the wrong reasons. The company has already faced scrutiny due to concerns over its recently recalled CPAP and BiPAP machines.

Philips CPAP and BiPAP Recalls

CPAP and BiPAP machines are the best treatment option for millions of people with sleep apnea and chronic obstructive pulmonary disease (COPD). CPAP machines deliver a constant flow of pressurized air through a mask, and BiPAP machines deliver pressurized air every time someone inhales. Sleep apnea can be deadly, and these devices help prevent dangerous interruptions in breathing.

Last year, Philips recalled millions of its assisted breathing devices after it emerged that a polyester-based polyurethane sound reduction foam could degrade, causing the user of the machine to inhale bits of foam. Inhalation of foam particles can cause headaches, upper respiratory irritation, chest pressure, and sinus infections. Prolonged exposure to foam particles can cause carcinogenic effects on the kidney and liver, and there have been reports of CPAP users developing cancer.

When the CPAP withdrawal was announced, Philips agreed to repair or replace the affected machines, but millions of people who used the devices waited more than a year for a replacement. Some of them had no choice but to continue using the faulty machines. The manufacturer plans to complete all repairs by the end of the year.

CPAP Lawsuits

Some CPAP and BiPAP users who got sick after using the faulty machines have sued Philips for marketing a Defective product. While cancer is the most serious concern, it is not the only health complication caused by foam degradation. Some patients developed asthma and other respiratory conditions due to inhalation of foam.

These lawsuits say that Philips failed to warn consumers about the risk of using its CPAP machines. The plaintiffs claimed that Philips knew its foam was dangerous, but still used it in its manufacturing process. This allegation is supported by the FDA, which found that Philips knew of the foam’s degradation potential years before the recall.

Philips has settled the government fraud allegations, but the manufacturer still faces lawsuits over its faulty CPAP devices. if you used any recalled Philips devices and developed a health condition afterward, you should speak with a qualified attorney. The attorneys at Herman Herman & Katz are experts in product liability law and can guide you through your options. Call us at 844-943-7626 or Contact Us for a free review of your case.

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