Whistleblower Gets $28.5 Million In Abbott Labs Kickback Case

GREEN OAKS, IL — Illinois-based medical device company Abbott Laboratories is set to pay $160 million to settle allegations from a former employee that a subsidiary filed false claims to Medicare.

The settlement claims Arriva Medical LLC, a former leader in mail-order diabetes testing supplies, violated the federal False Claims Act by diverting Medicare funding to patients who did not qualify for it.

According to a release from the Justice Department, Arriva provided free glucose monitors as an incentive for patients to order more testing supplies. Arriva and its parent company, Alere Inc., are also accused of waiving copayments. And from 2009 to 2016, prosecutors said Arriva submitted claims for 211 patients who had been dead at least two weeks.

Abbot finalized plans to buy Alere and its troubled subsidiary months after the fraud was alleged to have taken place, and unsuccessfully sued Alere to get out of the deal once the allegations became public.

The information was partially secured by a whistleblower from Arriva, a former minimum wage employee in one of the company's call centers in Antioch, Tennessee.

Gregory Goodman, 60, is set to receive $28.5 million from the settlement thanks to the False Claims Act, which lets whistleblowers claim money if a federal lawsuit is settled.

"Doing anything that defrauds the government or the Medicare program, it's fellow Americans who end up paying for it," Goodman said in an interview with Reuters. "The decision to move forward was quite simple."

Two months after the allegations went public, Arriva ceased operations. Its founders, David Wallace and Timothy Stocksdale, agreed in April 2019 to pay half a million dollars each to resolve Justice Department claims.

Abbott would not comment on the settlement to Patch.