Sleep apnea company pays $37.5M to settle kickback lawsuits

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ResMed, a San Diego-based company that sells sleep apnea machines, will pay $37.5 million to settle allegations that it provided kickbacks to obtain customer referrals

SAN DIEGO —
ResMed, a San Diego-based company that sells sleep apnea machines, will pay $37.5 million to settle allegations that it provided kickbacks to obtain customer referrals, federal prosecutors announced Wednesday.

The settlement covers five whistleblower lawsuits filed on behalf of the federal government. The lawsuits say that the company provided free services and equipment to medical equipment suppliers, sleep labs and other health care providers in violation of the federal False Claims Act.

“Paying any type of illegal remuneration to induce patient referrals undermines the integrity of our nation’s health care system,” Jody Hunt, head of the U.S. Justice Department’s civil division, said in a statement. “When a patient receives a prescription for a device to treat a health care condition, the patient deserves to know that the device was selected based on quality of care considerations and not on unlawful payments from equipment manufacturers.”

ResMed didn’t acknowledge any wrongdoing in the settlement but agreed to tighten controls on its pricing and sales.

In a statement, the company said it settled to avoid “the expense, inconvenience and distraction” of continuing the legal fight.

“We have always acted in good faith with patients and our valued customers, and we do not expect this to impact our relationship with either,” the statement said.

Shares of ResMed finished up 40 cents at $158.72 Wednesday on the New York Stock Exchange.

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