Alere Inc, a diagnostic company, has said on the day of Friday that the Medicare enrollment of one of its units had been revoked effective Nov. 4 by CMS (Centers for Medicare and Medicaid Services), which said the unit had submitted claims for 211 dead sufferers.
Shares of Alere dropped as much as 16% in heavy trading.
A notice on the day of Oct. 5 was sent to the unit of Arriva Medicaid LLC by CMS and canceled the unit's enrollment after Alere unsuccessfully appealed the decision on the day of Nov. 2, Alere revealed in a regulatory filing.
Arriva is believed to be the durable medical equipment of Alere that specializes in sending diabetic testing supplies through mail order.
According to CMS, Arriva submitted 211 claims for dead patients over 5 years, but its notice just identified 47 of the claims.
"We’re self-assure that the Medicare claims in question were submitted in reaction to what were understood to be valid refill orders from Medicare beneficiaries or their caregivers, and that Arriva hasn’t got or retained inaccurate reimbursement for these claims," an Alere spokesman told.
"According to our understanding, this matter is a result of the lag in timing between when Arriva processes reimbursement requests or appeals and when the CMS system updates sufferer status," he stated.
In accordance to Alere, it had conducted an initial inquiry and it didn’t believe that Arriva got or retained inaccurate reimbursement for the durable medical equipment items it furnished.
Alere reported lower-than-expected revenue for the 3rd quarter on Friday. Arriva's revenue of almost $88 million for the nine months ended on the day of Sept. 30 accounted for over 5.2% of the complete revenue of company, Alere said.