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Diaper maker pays $5M to settle lawsuit

Shield healthcare allegedly overcharged for its adult diapers and other products.

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By: Karen McIntyre

Editor, Nonwovens Industry

A California health care company is paying $5 million to settle a whistleblower lawsuit alleging it overcharged state and federal programs for adult diapers and other incontinence products.

The U.S. Attorney’s office in Los Angeles made the announcement Wednesday. The office said Santa Clarita-based Shield Healthcare agreed to pay $2 million to the U.S. government and $3 million to the state of California because both fund the Medi-Cal program at the center of the lawsuit alleging the company submitted false claims to the government.

Terry Donath, who worked for a Shield supplier, filed the lawsuit in 2007 alleging the country’s largest seller of adult incontinence supplies had exceeded regulations limiting billing to no more than double a product’s net purchase price.

Shield Healthcare spokeswoman Laura McIlvaine released a statement saying the company is in “full compliance” with Medi-Cal regulations and that the company had decided to settle the case.

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