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Accuray Hints At Potential Fraud Probe On The Horizon
Health care equipment firm details how easy it is to violate anti-kickback laws and exactly how a whistleblower might work with authorities to prove a company’s guilt.
February 2, 2023
Accuray Incorporated (ARAY), a maker of radiosurgery and radiation therapy systems for the treatment of tumors, has inserted new language in its latest quarterly filing that suggests it may be anticipating a federal bribery or fraud probe on the horizon. Though the company routinely includes boilerplate copy regarding anti-kickback statutes and false claims laws, Accuray latest filing offers new detail that sounds more like a possible explanation for such behavior or even a partial defense:

“Generally, courts have taken a broad interpretation of the scope of the “anti-kickback” laws, holding that these laws may be violated if merely one purpose of a payment arrangement is to induce referrals or purchases. Further, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.”

In addition to prison sentences and fines, violating anti-kickback laws can result in being barred from participating in federal healthcare programs like Medicare and Medicaid as violating federal anti-kickback statutes may also constitute a violation of the federal False Claims Act.

Shortly thereafter, Accuray includes additional new language detailing how whistleblowers may be secretly working with authorities unbeknownst to companies targeted in False Claims investigations:

“In addition to actions initiated by the government itself, the federal False Claims Act authorizes actions to be brought on behalf of the federal government by a private party having knowledge of the alleged fraud called a “relator”. Because the complaint is initially filed under seal, the action may be pending for some time before the defendant is even aware of the action.”

In all, Accuray added 308 new words detailing how easy it is to violate anti-kickback laws or exactly how a whistleblower might work with authorities to prove a company’s guilt.

In previous filings, Accuray acknowledges “a variety of financial relationships” with doctors who are in a position to generate sales for the company, including:

— Physicians who own Accuray’s stock also provide medical advisory and other consulting or collaboration services
— Customers can receive certain services and upgrades without additional charge based on procedure volume
— Accuray has loaned money to customers
— The company also provides research or educational grants to customers
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