ResMed Will Pay $37 Million to Settle Kickback Dispute With DOJ

Sleep specialist ResMed (NYSE: RMD) was ordered to pay $37 million to settle a lawsuit with the Department of Justice over kickback allegations made in five whistleblower lawsuits. The civil lawsuits alleged that the company had violated the federal False Claims Act and Anti-Kickback Statute.

The DOJ claimed that ResMed, a leading provider of medical equipment for patients who suffer from sleep apnea, was providing free or under-cost equipment and services to sleep labs, and the company would charge more if the sleep lab was using competitor's equipment.

"When companies give free equipment to doctors for the sole purpose of generating business and increasing their bottom lines, federal health insurance programs should not foot the bills. This case rights that alleged wrong by ResMed," said U.S. Attorney Richard P. Donoghue for the Eastern District of New York. "We will continue to work with our law enforcement partners to hold accountable companies that put profits before patients."

Source Fool.com