Bayer HealthCare L.L.C. will pay $97.5 million to settle charges by the U.S. Justice DepartmentÂ
that the Tarrytown company paid nearly $3 million in kickbacks to 11 suppliers of Medicare-covered diabetics in an alleged “cash-for-patient” scheme.
The settlement, separately announced late last month by Justice Department and Bayer officials, does not acknowledge liability on the company”™s part, Bayer officials said.
Federal officials said the alleged scheme involved Bayer”™s contracts with mail-order suppliers of the company”™s diabetic self-testing products. Over a six-year period, the company allegedly paid approximately $2.5 million to one of the largest contractors, Liberty Medical Supply Inc., to convert its patients to Bayer supplies from its competitors”™ products. The kickbacks allegedly were disguised as advertising payments. Federal officials also alleged Bayer paid about $375,000 to 10 other diabetic suppliers based on the number of patients who switched to Bayer products.
The settlement resolves claims submitted to Medicare by those suppliers for Bayer products from 1998 through 2007. Bayer agreed to enter into a corporate integrity agreement with the Office of Inspector General for the Department of Health and Human Services.
A Bayer spokesperson said the company reached the settlement “to avoid the time, uncertainty and expense of litigation.” As required by the corporate integrity agreement, the company will review and enhance its compliance programs and employee training.
Arthur Higgins, chairman of the Bayer HealthCare board of management, said the company is “eager to move forward, focus on our current business and most importantly, continue to be a valued and respected health care provider.”
