Coloplast and Liberator Medical to Pay $3.6M for False Medical Claims; Whistleblower Share TBD
Coloplast Corp. and Liberator Medical Supply have agreed to pay $3.16 million and $500,000, respectively, to settle allegations that the companies knowingly submitted or caused the submission of false claims to federal health care programs, the U.S. Department of Justice announced last month.
The settlement with Coloplast resolves allegations that it paid kickbacks to Byram Healthcare Centers, Inc.; CCS Medical, Inc.; Liberator; Liberty Medical, Inc. and Handi Medical, Inc., in return for marketing promotions and conversion campaigns. In the case of Byram, Liberty and Handi, Coloplast’s promotional campaigns allegedly included kickbacks in the form of funding for cash incentives – sometimes known as “spiffs” – paid to the suppliers’ sales personnel to induce them to refer patients to Coloplast products. In other instances, Coloplast allegedly gave rebates or price concessions as inducements for the promotional campaigns.
The settlement with Liberator resolves Liberator’s alleged receipt of kickbacks from Coloplast in the form of price concessions, in return for Liberator’s agreement to conduct two campaigns promoting Coloplast ostomy products to Liberator’s customers.
The False Claims Act settlements resolve allegations brought in a whistleblower lawsuit filed by two former employees of Coloplast under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. Under the False Claims Act, a whistleblower is entitled to receive a share of the federal recovery. The whistleblowers’ share of the Coloplast and Liberator settlements has not been determined. Claims against other defendants in the case remain outstanding.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.