Siemens Agrees to $5.9 Million Settlement Over Federal Charges

Malvern-based Healthcare technology company Siemens Medical Solutions USA, Inc. has agreed to pay $5.9 million to resolve an investigation into the overcharging of the federal government for purchases of medical imaging equipment, according to the U.S. Attorney’s Office in the Eastern District of Pennsylvania.

The Defense Supply Center of Philadelphia (DSCP) negotiated and entered into an agreement with Siemens for the purchase of medical imaging equipment and support products between 2002 and 2008. The United States Department of Veterans Affairs also purchased medical imaging equipment through the DSCP Contract.

Prosecutors alleged that Siemens failed to provide the best price for certain purchases made pursuant to the contract. Specifically, Siemens did not give the Department of Defense the largest discount that a private or commercial customer had received for a “like system,” and, in doing so, overcharged the government.

Siemens also withheld information about this overcharging and kept money that it was not entitled to retain, according to the charges. After Siemens uncovered evidence of the overcharging, the company allegedly issued mass discounts on multiple occasions to address the misbilling on a prospective basis. Siemens did not correct the overcharging that had occurred and further concealed it from the United States.

According to the Philadelphia Business Journal, Siemens released a statement saying it has “further improved its processes for monitoring government contract compliance over the years and continues in its unwavering commitment to its customers, including important government customers, and adherence to all applicable laws and regulations.”

The United States also alleged that Siemens overcharged the VA for certain imaging equipment orders – purchases made under the same contract – that had been converted to a newer model. Specifically, certain VA orders did not receive the larger discount that applied to the newer model which was delivered.

The allegations arose from an investigation led by the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service. The case was handled by Assistant United States Attorneys Eric D. Gill and Viveca D. Parker.