By Kanishka Singh
WASHINGTON (Reuters) -A subsidiary of Dutch medical device maker Philips has agreed to pay over $24 million to resolve alleged false claims over respiratory-related medical equipment, the U.S. Justice Department said on Thursday.
The subsidiary, Philips RS North America LLC, formerly known as Respironics Inc, resolved allegations that it misled federal healthcare programs by paying kickbacks to durable medical equipment suppliers, the Justice Department said in a statement.
Respironics allegedly gave the suppliers physician prescribing data free of charge that could assist their marketing efforts to physicians, the Justice Department said.
“Paying illegal remuneration to induce patient referrals undermines the integrity of our nation’s healthcare system,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s civil division.
Respironics also entered into a five-year agreement with the U.S. Department of Health and Human Services, Office of the Inspector General to implement a compliance program that includes review of arrangements with referral sources and monitoring of Respironics’ sales force, the Justice Department said.
A Philips spokesperson said its subsidiary agreed to settle the claim to avoid the required expense of litigating the allegations.
“In agreeing to a settlement, Philips Respironics is not acknowledging any alleged facts, liability, or wrongdoing in the claim,” the company spokesperson said in an emailed statement.
“This agreement should have no impact on our customers or the patients they serve,” the company added
(Reporting by Kanishka Singh in Washington; Editing by Jonathan Oatis and Alistair Bell)
Compliance refers to the process of ensuring that a company adheres to laws, regulations, and internal policies to maintain ethical standards and avoid legal issues.
A kickback is a form of bribery where a person or organization receives a reward for facilitating a transaction or appointment, often in violation of legal or ethical standards.
A compliance program is a set of internal policies and procedures designed to ensure that an organization follows legal standards and ethical practices in its operations.
Corporate governance refers to the systems and processes that direct and control a company, focusing on the relationships among stakeholders and the goals of the organization.
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