The U.S. subsidiary of Coloplast A/S based in Denmark named Coloplast Corp. will be paying $3 million. This is to resolve and end accusations that they created unlawful payments to initiate thousands of senior citizens in switching to their devices.
A federal whistleblower lawsuit was made by former Coloplast President Kimberly Herman plus two more insiders against the company. They alleged that the defendant violated the federal anti-kickback statute outlawing to pay for Medicare referrals, said Mankato Free Press.
The said payments give incentives on overuse. They can also cause growth in health care costs for the entire system. In addition, United States Attorney Carmen M. Ortiz said that the payments weaken the federal healthcare programs, which may ultimately distort consumer purchasing decisions.
Minneapolis Star Tribune also stated that the ostomy and continence care product manufacturer was not obliged in admitting any misconduct as part of the settlement. The company made a written statement saying the choice to settle the case was urged only by business considerations.
Last December 23, Coloplast CEO Lars Rasmussen said that they are satisfied to finally close the case in order for them to continue their US activities. This includes dealer partnerships which are at the same level as before the investigation.
As for special agent in charge of the FBI, Boston Field Division Harold H. Shaw, he thinks that Coloplast Corp., together with Liberator Medical Supply Inc., acted with their own self-interests in mind, thinking first of profits before patient care, according to Healthcare Finance News.
Shaw added that deciding on which medical products to refer must be based on what is best for the patient and not on cash incentive nor rebates. It was since 2009 that Coloplast was said to already make forbidden payments to third-party suppliers in order to persuade them in running promotional campaigns. However, things have turned around now as the company pays an indeed huge amount to correct their mistakes.
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