Arriva Medical: Free Meters, Copay Waivers and the $160 Million Joint Settlement

In the Arriva Medical settlement, the company and its parent, Alere, agreed to pay $160 million jointly over alleged Medicare kickbacks through free meters and copay waivers, billing for ineligible replacement meters, and claims for deceased beneficiaries. A former call-center employee brought the qui tam case. The government’s complaint reaches into the business behind the offer: the meter could be given away because the money was in the testing supplies that followed it.

Arriva was a mail-order diabetic testing supplier based in Coral Springs, Florida, and at one point the nation’s largest Medicare supplier in that business. Alere acquired it in November 2011. The Department of Justice announced the civil settlement on August 2, 2021, resolving allegations that reached from the sales call through the Medicare claim.

Free Meters and the Five-Year Replacement Rule

Arriva allegedly billed Medicare for glucose meter replacement within five years of the previous meter. The Justice Department said beneficiaries were eligible for reimbursement for a new meter only once every five years, yet Arriva allegedly provided and billed for a meter for every new patient without regard to eligibility. Existing customers allegedly received new meters even when Arriva itself had billed Medicare for their previous ones inside that window.

According to the government, from April 2010 through the end of 2016, Arriva offered free or no-cost glucometers and routinely waived or failed to collect copayments, with Alere’s approval. Advertising brought in the customer. During the intake call, Arriva allegedly promised that the meter would cost the beneficiary nothing even if Medicare refused to pay. The government said that refusal typically came because the customer was not yet entitled to a replacement.

The government’s amended complaint quoted a sales supervisor’s June 2013 explanation of those denials:

That email matters because it describes a decision to submit the bill with the expected denial already understood. The complaint also quoted instructions to send a meter with every new order, even when a patient said they did not want one. An intake employee could hear the customer’s objection while the billing department held the earlier meter claim.

The Testing Supplies Were the Business

Arriva’s relationship with the customer can continue through repeat orders for strips and lancets. The government alleged that Arriva used free additional meters to persuade existing customers to reorder those supplies from Arriva.

The complaint put the commercial incentive in plain figures. It alleged that Arriva’s financial records showed approximately $78.5 million in net revenue from testing strips and lancets in 2015, compared with approximately $2.5 million from glucometers.

The government quoted an operations executive explaining which part of an order mattered:

The free meter was an expense the company could absorb to keep the supply orders coming. That is the business logic the government’s allegations describe, and why looking only at whether Medicare paid for the meter misses the rest of the transaction.

How the Alleged Copay Waivers Kept Orders Coming

Arriva’s alleged copayment practices carried the free offer into the billing department. The government said the company failed to send invoices, collection letters or make collection calls in circumstances where it should have tried to collect the customer’s share.

Arriva allegedly waived unpaid copayments automatically after no more than three invoices, with no further collection effort. Customers who complained that Arriva had advertised their supplies as free allegedly received waivers too.

The complaint said small balances were erased by date of service before an invoice went out or the amounts could accumulate. It also alleged that Arriva used financial-assistance forms as a pretext to waive copayments for patients who simply did not want to pay. One employee notation quoted in the complaint tied assistance directly to keeping the customer:

The government’s account of a company presentation made the distinction sharper still. Patients responsible for the full supply bill could lose service for nonpayment. Patients whose bills Medicare primarily paid would not be canceled for a billing reason. In that alleged arrangement, the patient’s unpaid balance did not interrupt the government-funded orders.

The complaint identified a December 2015 mass write-off of more than $2.2 million in copayments under the company’s three-statement policy. In the complaint’s account, a customer heard that supplies were free, and the billing system erased the customer’s share.

The supplier collecting the required patient payment has to compete against the promise of free supplies. The same competitive issue appeared in Lincare’s 2018 settlement over allegations of illegal price reductions to Medicare beneficiaries. A former billing supervisor brought that case.

Deceased-Beneficiary Claims and the Supplier Number

The Arriva settlement also covered allegations that the company billed Medicare for deceased beneficiaries. The Justice Department said Medicare revoked Arriva’s supplier number in November 2016 for billing on behalf of deceased beneficiaries. Arriva ceased business operations in December 2017.

The complaint alleged claims for items purportedly supplied to 211 beneficiaries who had been dead for more than fourteen days when the claimed service occurred. Its example of Patient F shows why the eligibility record matters. The government alleged that Arriva ran an eligibility check on July 1, 2014 that showed the patient was deceased. On August 20, it nevertheless shipped testing supplies and billed Medicare $357.

The important sequence is the company’s own information followed by its own shipment and bill. A billing employee who sees the eligibility response and the later claim can see something a sales call alone would not reveal. Here, the government’s allegation was that the death information was already available inside Arriva before the order went out.

The Joint Settlement and the Separate Resolutions

The call-center whistleblower started the Arriva case, and the United States joined part of it. The government’s allegations covered both Arriva’s practices and Alere’s approval of them.

Arriva’s founders had separately agreed to pay a combined $1 million over allegations that they participated in the kickback scheme. The government announced that resolution in April 2019.

The corporate agreement left the reimbursement consultant and Grapevine Billing and Consulting Services outside the settlement. That changed on February 14, 2022, when the Justice Department announced their separate resolution. The settlement amount was $50,000.

The later announcement described the consultant’s sworn admissions: personally writing off copayments probably every week and making mass write-offs of Medicare denials for ineligible meters. The consultant also admitted creating the policy of not billing customers who owed less than $5 and the policy of “courtesy adjustments” that waived copayments after customer complaints.

The government alleged that, through Grapevine, the consultant effectively headed Arriva’s reimbursement department, developing copayment policies and submitting Medicare claims.

The person setting collection policy and directing write-offs may work through a consulting company while controlling decisions inside the supplier.

What the Call Center Could See

Arriva’s whistleblower had worked at its call center in Antioch, Tennessee. The case shows why that position mattered: the alleged inducement was delivered during the conversation with the customer. A worker could recognize the free-meter promise, the offer tied to a reorder, or an objection to receiving another meter.

The other parts of the alleged scheme lived in other records: previous meter claims, invoice histories, balance adjustments, eligibility responses and shipments. The complaint’s internal emails connect sales instructions with reimbursement decisions. The later consultant testimony connects those decisions with the person who designed and applied the collection policies.

For a call-center, billing or reimbursement insider, the useful knowledge is how those parts fit together. A supervisor’s instruction can explain why the same adjustment keeps appearing on customer accounts. An eligibility response can show what the supplier knew before it billed. We work with insiders to connect those decisions to the Medicare claims and build the whistleblower case around what they actually saw.

How Much Is a Whistleblower Claim Worth?

The Arriva call-center whistleblower’s announced share was approximately $28.5 million from the recovery in the joint settlement. That was the whistleblower’s portion of the recovered money, not an additional payment on top of the corporate settlement.

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

You Know What the Customer Was Promised

If you know how a free-meter offer became a waived balance or a Medicare bill, talk with our whistleblower experts about the practices you saw. We build your case with you, bring in Medicare fraud whistleblower lawyers who understand diabetic supply billing, and stay beside you through the pursuit of a recovery.