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Press Release

Areté Sleep to Pay the United States $650,000 to Resolve False Claims Act Allegations

For Immediate Release
Office of Public Affairs

WASHINGTON – Areté Sleep LLC, Areté Sleep Therapy LLC and Areté Holdings LLC have agreed to pay the United States $650,000 to settle allegations that their sleep medicine and durable medical equipment facilities in Arizona and Texas submitted false claims to Medicare, the Justice Department announced today.


Today’s settlement resolves False Claims Act allegations that, from Nov. 1, 2002, through Dec. 31, 2009, Areté made false claims to Medicare for diagnostic sleep tests performed by technicians lacking the licenses or certifications required by Medicare rules and regulations. The settlement also resolves related allegations that Areté made false claims to Medicare for medical devices resulting from these same technicians’ tests.


On Jan. 26, 2011, Areté filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court in the District of Arizona. Areté has agreed to pay the False Claims Act settlement from the proceeds of the sale of its assets.


“The Department of Justice is committed to preventing waste, fraud and abuse in the Medicare program and ensuring that these funds are not spent on care that does not meet Medicare’s standards,” said Tony West, Assistant Attorney General for the Justice Department’s Civil Division.


“Cheating Medicare harms not only the health care of others but all taxpayers,” said Dennis K. Burke, U.S. Attorney for the District of Arizona. “This settlement demonstrates the ongoing efforts of our office to recover taxpayer dollars for the Medicare program.”


All three Arete entities were named as defendants in a whistleblower lawsuit brought under the False Claims Act, which permits private citizens, known as “relators,” to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. Relator Amanda Drews will receive $107,250 as her share of the recovery.


“Every Medicare dollar is precious, so we expect the program will only be billed for properly provided services,” said Glenn R. Ferry, Special Agent in Charge, Los Angeles Region, Office of Inspector General (OIG) of the Department of Health & Human Services (HHS). “Maintaining the integrity of Medicare is a top OIG priority.”


The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the District of Arizona, the Commercial Litigation Branch of the Justice Department’s Civil Division and HHS-IG.


“This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and HHS Secretary Kathleen Sebelius in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.7 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $7.3 billion.”

Updated September 15, 2014

Press Release Number: 11-689