Alere: The Parent Behind Arriva’s Copayment Policies

In the Alere Arriva Medicare settlement, Alere Inc. and Arriva Medical LLC agreed to pay $160 million to resolve allegations of beneficiary kickbacks, billing for ineligible glucose meters and claims for deceased patients. The government’s case reached from the sales call to the parent company’s compliance office: Alere allegedly approved policies that kept customers supplied while their copayments disappeared.

The Department of Justice announced the civil settlement on August 2, 2021. Arriva had been a mail-order diabetic testing supplier based in Coral Springs, Florida, and at one point the nation’s largest Medicare supplier in that business. The government alleged that its free-meter and copayment practices ran from April 2010 through the end of 2016, crossing the acquisition that made Alere its parent.

Alere’s Control After the Acquisition

Alere acquired Arriva in November 2011. The government’s amended complaint alleged that Alere and its executives then operated and managed the supplier, directing decisions about the business and reviewing its financial records.

The complaint describes quarterly meetings where Arriva executives presented to Alere management and received directions. Arriva also regularly sent the parent an executive report containing financial and operational information. According to the government, those reports and other financial documents included glucometer and copayment write-offs, often recorded as bad debt. The same balances that vanished from a patient’s account allegedly appeared in reports going up to the parent.

Compliance followed the same reporting line. The complaint alleged that an Alere employee ran Arriva’s compliance function and that Alere’s global audit team examined Arriva’s business functions in May 2015, sending its report to Alere executives the following month.

Abbott completed its acquisition of Alere, including Arriva, in October 2017. Arriva ceased business operations that December.

The Meter Opened the Door to Repeat Supply Orders

The alleged free-meter scheme pursued the continuing sale of testing strips and lancets. Arriva’s own financial records made the incentive visible: the government said that in 2015 the company generated approximately $78.5 million in net revenue from strips and lancets, compared with approximately $2.5 million from glucometers.

The complaint quoted an Arriva vice president of operations explaining the priorities in an email:

The same email said meters and lancing devices cost too little to hold up the order and should ship at no charge if insurance did not cover them. That is why the government’s allegation covered both free meters for new customers and additional free meters offered to existing customers to induce reorders.

The promise to patients predated the acquisition. A September 2009 sales document told representatives:

The government alleged that Alere allowed that policy to continue after buying Arriva. The acquisition changed the owner while the sales promise allegedly stayed in place.

Copayment Waivers and Alere’s Compliance Office

The government alleged that Alere explicitly approved the policies used to erase patient copayments. Its complaint identified a written patient-payment policy adopted in 2015 and the Alere compliance employee who approved both the small-balance waiver and the waiver after three statements.

The complaint explains that patients generally owed 20 percent of the cost of their ongoing testing supplies. The government alleged that Arriva used waivers of that patient share to keep the supply orders coming. Its settlement announcement described the harm: wasted taxpayer money intended for health care and an unfair advantage over competitors.

Small copayments allegedly disappeared before Arriva even sent an invoice. Other unpaid balances were allegedly waived after no more than three invoices, without further collection efforts. The settlement announcement also described waivers for customers who complained that advertisements or sales representatives had told them their supplies would cost nothing.

Financial-assistance paperwork allegedly supplied another way around collection. The complaint said Arriva used its hardship form as a pretext to waive copayments for patients who simply did not want to pay. It also described different treatment depending on who owed the bill: a patient responsible for the entire cost could lose service, while a patient whose supplies Medicare primarily paid for would continue receiving them despite an unpaid balance.

The government alleged that employees raised concerns about misleading advertisements and poor collection efforts with management. The complaint also said copayment waivers continued with Alere’s supervision and approval after the companies learned of the federal investigation.

Replacement Meters Before the Five-Year Limit

The government also alleged that Arriva, with Alere’s approval, provided and billed for a meter for every new patient without regard to eligibility. In explaining that allegation, the Justice Department said Medicare paid for a new meter only once every five years. Arriva allegedly billed again for patients whose earlier meters it had itself billed within that window.

The complaint quoted a June 2013 sales-supervisor email acknowledging that Medicare would deny a meter already paid for within the preceding five years, but telling staff to bill anyway and write off the unpaid amount. A separate instruction told the sales team to send a meter with every new-start order even when a patient said they did not want one.

The alleged policy made the denial part of the business process. The supplier allegedly absorbed the meter cost and kept pursuing the supply customer.

Deceased Patients and the Supplier Number

The government alleged that Arriva billed for supplies purportedly provided to 211 beneficiaries who had been dead for more than fourteen days on the claimed service dates. Medicare revoked Arriva’s supplier number in November 2016 over deceased-beneficiary billing.

One example in the complaint connected an eligibility check to a later shipment. Arriva allegedly checked a Kentucky patient’s eligibility and learned she was deceased. Seven weeks later, it shipped testing supplies and billed Medicare $357. Medicare denied that claim.

The Corporate Settlement and Separate Resolutions

Arriva’s founders had previously paid $1 million to resolve allegations that they participated in the kickback scheme.

The reimbursement consultant and Grapevine Billing and Consulting Services remained outside the corporate settlement. Their separate resolution in February 2022 required $50,000.

That later announcement also described sworn testimony in which the consultant admitted writing off copayments, making mass write-offs of denied meter claims and creating a courtesy-adjustment policy for customers who complained about their copayments. It supplied an account from the person helping run reimbursement of how those policies worked.

Missing Signatures in the Separate Florida Case

A separate Florida whistleblower case against Arriva, Alere and Abbott challenged billing without patient signatures. As the court’s account of the allegations explains, a former senior vice president of business development and marketing alleged that Arriva supplied diabetic testing products and submitted claims without obtaining required assignment-of-benefits signatures.

The opinion describes internal audit allegations connecting the missing signatures to submitted claims. That employee’s view of the business adds another angle to the parent-company story: what internal reviews showed about the paperwork behind the bills.

What Evidence Is Needed for Reporting Fraud?

In a healthcare fraud case like this, useful evidence connects the sales promise, billing policy and Medicare claim. Parent-company, call-center and billing employees see different parts of that business. Our whistleblower experts work with you to connect the part you know to the decisions and claims behind it.

What Is the Reward for a Medicare Fraud Whistleblower?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In the Alere and Arriva case, the Justice Department announced a $28.5 million share of the corporate settlement for the former employee who brought the qui tam case. The employee worked at Arriva’s call center in Antioch, Tennessee. The government joined the case in 2019.

You Know Who Approved the Policy

If you saw copayment policies approved at the parent company or write-offs treated as the price of keeping Medicare customers, speak to our whistleblower experts about who approved those waivers. We work with you to build your strongest Medicare whistleblower case and bring in Medicare fraud whistleblower lawyers who understand supplier billing and corporate decision-making. We stay beside you as partners throughout the case.