On May 28, 2014, the U.S. Department of Justice announced that Medtronic, Inc., the large medical device manufacturer based in Fridley, Minnesota, has agreed to pay the U.S. government $9.9 million to settle claims that it paid illegal kickbacks to physicians to induce them to implant Medtronic’s pacemakers and defibrillators in patients. The lawsuit was originally filed under the qui tam provisions of the False Claims Act by a whistleblower (a former employee of Medtronic), who will receive about $1.73 million as his share of the settlement (the False Claims Act permits ordinary citizens to file a lawsuit on behalf of the United States to recover for false claims and to share in the recovery by the United States).
The U.S. government alleged that Medtronic’s illegal inducements provided to implanting doctors to use Medtronic devices led to false claims being submitted to Medicare and Medicaid. It was alleged that the illegal kickbacks consisted of Medtronic’s payments to physicians who implanted its devices to speak at events, in order to increase the flow of referral business to Medtronic; Medtronic developing no-cost marketing/business development plans for physicians; and, Medtronic providing free tickets to physicians for sporting events.
In announcing the settlement, the U.S. Attorney for the Eastern District of California stated, “Decisions about devices used to treat cardiac rhythmic disease should be based on the best interests of the patient, not on whether the manufacturer is going to pay a kickback. These sorts of improper financial incentives not only undermine the integrity of medical decisions, they also waste taxpayer funds and are unfair to competitors who are trying to play by the rules.”
An Assistant Attorney General from the U.S. Department of Justice’s Civil Division stated, “Improper financial incentives have the potential to compromise physician medical judgment. This case demonstrates the Department of Justice’s commitment to pursue medical device manufacturers that use improper financial relationships to influence physician decision-making.”
The False Claims Act lawsuit is captioned United States ex rel. Schroeder v. Medtronic, Inc., Case No. 2:09-cv-0279 WBS EJB (E.D. Cal.).
Since January 2009, the U.S. Department of Justice has recovered more than $19.2 billion through False Claims Act cases, of which in excess of $13.7 billion were recovered in cases involving fraud against federal health care programs.
If you have information regarding false claims having been submitted to Medicare, Medicaid, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly seek to consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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