Alere (NYSE:ALR) said today that federal judge upheld a ban imposed on its Arriva Medical diabetes division by the Centers for Medicare & Medicaid Services, vowing to appeal the decision barring the unit from government insurance reimbursement.
Arriva, which makes durable medical equipment for diabetic testing, was informed last October that its Medicare enrollment would be revoked by CMS, which accused the company of submitting claims for 211 deceased patients. Alere’s initial appeal was denied and CMS revoked Arriva’s enrollment 2 days later.
Alere then asked an administrative law judge to restore its enrollment, but said today in a regulatory filing that that appeal was denied April 25.
The company has said that the 211 claims allegedly made for dead people made up less than 0.003% of its 5.7 million filed claims.
“We intend to proceed with the administrative appeals process by appealing the ALJ decision to the Dept. Appeals Board,” Alere said in the filing today.
The Waltham, Mass.-based company is set to be acquired by Abbott (NYSE:ABT). The $5.8 billion deal, announced in February, soon ran into trouble. A March 11 subpoena from the U.S. Justice Dept. sought documents on Alere’s dealings with 3rd-party distributors and foreign healthcare officials and the company was late in filing its full-year results for 2015.
Alere in April 2016 rejected a $50 million offer to spike the merger and a few months later sued Abbott, looking to force the deal. Abbott filed its own lawsuit seeking to terminate the buyout, citing a “substantial loss in Alere’s value;” last month Abbott agreed to go through with the deal, but at the much lower price of $5.3 billion.