The founders and former executives of a mail-order diabetes testing supply company each agreed to pay $500,000 to settle allegations that they violated the False Claims Act, according to the Department of Justice.
David Wallace and Timothy Stocksdale co-founded Arriva Medical in Coral Springs, Fla. After its sale to diagnostic testing company Alere in Waltham, Mass., Mr. Wallace and Mr. Stocksdale remained on as Arriva's president and vice president, respectively, from 2011-13.
The settlement, reached in the Middle District of Tennessee, settled allegations that the former executives caused Arriva to submit false claims to Medicare. The claims, according to prosecutors, involved monetary kickbacks to beneficiaries, such as free or no-cost home blood glucose meters. They also waived or didn't collect copayments from 2011-13, according to the Justice Department. The settlement also resolves accusations that the former executives caused Arriva to bill Medicare for medically unnecessary home blood glucose meters.
In 2016, CMS revoked Arriva's Medicare billing privileges for durable medical equipment after it shipped goods to a beneficiary more than 14 days after their death. Arriva stopped operating in late 2017.