Arriva Medical: Audit Findings That Changed the Appeal

Arriva Medical’s 2024 Rule 9(b) decision revived allegations that the supplier billed Medicare claiming to hold assignment-of-benefits signatures it had never collected. The Eleventh Circuit’s December 20, 2024 opinion turned on something a supplier’s employee would recognize: an internal audit of claims already billed to Medicare. The audit allegations connected missing paperwork to actual requests for payment.

The court revived the former executive’s assignment allegations and his claim that Arriva acted with Alere and Abbott to submit false Medicare claims. It left his separate allegations about undisclosed supplier locations dismissed. The same audit did different work for different allegations.

The Mail-Order Business Behind the Claims

Arriva Medical supplied diabetic-testing products by mail from a business based in Florida. The appellate opinion recounts the executive’s allegations: Alere bought Arriva in 2011, Arriva secured a Medicare competitive-bidding contract for mail-order diabetic supplies in 2013, and Abbott Laboratories bought Alere in 2017. The whistleblower was Arriva’s former senior vice president of business development and marketing. He brought this False Claims Act case in 2019, and the government declined to join it.

He alleged that Alere established Arriva Medical Philippines as a separate company after acquiring another diabetic-supply business. According to his complaint, that operation eventually accounted for roughly 80% of Arriva’s workforce serving U.S. beneficiaries. Its employees handled most initial intake calls, reorders, prescription orders, medical-record requests and billing. He also described call centers in Arizona and Tennessee, with products shipped from Hebron, Kentucky.

A mail-order supplier’s work runs through several hands before it becomes a Medicare claim. The call, the prescription, the shipment and the billing record describe different parts of that work. In this case, the executive’s allegations reached across those operations through management meetings, employee supervision and the company’s audits. His access mattered because he could explain what the company’s own records were measuring.

The Supreme Court Sent the Appeal Back

The Supreme Court set aside the earlier appellate judgment in 2023. In its April 22, 2022 opinion, the Eleventh Circuit had left the dismissal standing because it found the allegations about the companies’ knowledge insufficient. The Supreme Court later clarified that part of the False Claims Act and directed the appeals court to reconsider this case.

The published decision then addressed the detail connecting the alleged practices to claims submitted for payment. That changed the result for the assignment allegations.

The Assignment Audit Reached Claims Already Billed

Arriva allegedly represented that it had a “signature on file” when submitting claims to Medicare and Medigap, although the signed assignments did not exist. Assignment is the arrangement through which Medicare can pay a supplier directly. The parties disputed whether these particular products required signed assignments.

The whistleblower also alleged a business reason for leaving the signatures uncollected. At a management meeting in the summer of 2013, he proposed obtaining assignments electronically. Arriva allegedly abandoned that approach because its U.S. sales manager thought it would lengthen calls and reduce commissions. The alleged choice put the speed of a sales call ahead of collecting the paperwork the company said it held. Taxpayers were being asked to pay on the strength of signatures the supplier allegedly did not have.

He alleged that consultants had flagged missing assignments well before the heating-pad audit. For new orders in the first quarter of 2013, they found assignments for only 60% of the claims submitted. The complaint described a recurring problem inside the business, not a surprise discovered outside it.

The heating-pad audit supplied the connection that changed the appeal. The whistleblower alleged that consultants found assignments on file for only 53% of heating pads shipped to beneficiaries and billed to Medicare in the third quarter of 2015. He alleged that similar audits arrived monthly without improvement in assignment compliance for heating pads, vacuum erection devices and orthotic braces.

The words about billing made the difference. The audit allegations described products, a period, missing assignments and claims already sent to Medicare. The court did not have to guess whether the company had requested payment. It also considered the executive’s access to weekly meetings and employees when assessing how he knew what he alleged.

The district court had focused on his absence from the billing department and had not addressed the internal-audit allegations. The appeals court considered the audit alongside the information his position gave him. His role in healthcare management helped explain his access to the records and decisions behind the bills.

Philippines Work Billed as Florida Work

The whistleblower alleged that Arriva’s billing software made claims processed in the Philippines appear to have been processed in Florida. He said Arriva used undisclosed or unaccredited operations in the Philippines, Arizona and Tennessee while telling Medicare that its only location was in Florida and that it would not use subcontractors.

He alleged that Arriva Philippines performed nearly all of Arriva’s duties under an informal business association agreement. He also described management discussions about obtaining supplier numbers and accreditation for the U.S. call centers, followed by a decision against doing so.

Location has a commercial meaning in this industry. Medicare’s supplier standards connect accreditation to locations and to the specific products and services a supplier provides. The site doing the work and the billing identity shown to Medicare were at the center of this allegation.

The location allegation stayed dismissed because the complaint did not connect a submitted claim to both a challenged site and a product covered by the competitive-bidding contract. The heating pads that carried the assignment allegation were outside that contract, according to the complaint. Knowing how the business routed work and knowing which claims that work produced were different parts of the case.

The Separate Arriva Settlement

Arriva and Alere’s $160 million settlement came from a different whistleblower’s case, brought by a former call-center employee, and was not a result of this executive’s appeal.

Your Knowledge of Medicare Billing

We work with you to connect what happened inside a supplier to what it billed Medicare: what the audit examined, which products and periods it covered, what the company told Medicare and what management knew about the discrepancy. The Arriva appeal shows why someone outside the billing department can still know the records and decisions behind a health care claim.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What the Audit Found

We build the case with you and bring in durable medical equipment fraud whistleblower lawyers who understand the connection between sales decisions, supplier records and Medicare billing. We stay beside you throughout that work. If you saw assignments missing, audit findings ignored or claims attributed to a different operation, talk with our whistleblower experts about what happened inside the supplier.