Phillips is paying $24 million (€24.1 million) to lawyers in the United States for allegedly misleading US health insurance plans. With the settlement, the Dutch Medical Technology Institute and the Department of Justice in the United States put an end to the issue. Prosecutors alleged that a subsidiary of Philips paid bribes to suppliers of medical equipment.
The allegations revolve around Respironics, a respirator formerly owned by Philips since 2007. The U.S. Department of Justice suspects that the company “paid” medical device suppliers with free information about treatments that doctors are prescribing for patients, which could help with marketing. In response, suppliers reportedly submitted claims to the Medicare, Medicaid and TRICARE health insurance programs for the ventilators. It can be frustrating.
With the settlement, Phillips partially pleaded not guilty. However, the company has pledged to participate in a five-year program aimed at doing business with integrity. Former Respironics is also taking a critical look at its contracts with parties prescribing medical treatments for patients. The company’s sales force is also monitored.
A Respironics employee who allegedly defrauded U.S. authorities will receive a portion of the payout from Phillips. That’s about $4.3 million, according to the U.S. Department of Justice.
Earlier this week, Phillips reached a $4.2 million settlement with U.S. attorneys. The company has not formally informed the military about changes in some of the medical equipment used by the armed forces.