A Florida-based medical device company has agreed to pay $16 million in a settlement for making $16 million in kickback payments to a Colorado orthopedic surgeon, a U.S. government press release said.
The company, Arthrex, purportedly paid the surgeon royalties for contributing to the development of its products. The release said that the United States contended that Arthrex’s participation in the scheme was a violation of federal anti-kickback laws and the False Claims Act for causing the submission of fraudulent Medicare claims.
"Medical device manufacturers who engage in such kickback schemes undermine the integrity of federal health care programs,” Phillip M. Coyne, special agent in charge of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), said in a statement. “Working closely with our law enforcement partners, our agency will continue to protect patients and taxpayers by holding accountable companies that engage in unlawful activities.”
The case was brought by a client of the Whistleblower Law Collaborative LLC, the release said. As a private party who filed on behalf of the United States, the client will receive a portion of the settlement amounting to $2.5 million.
“Arthrex may have believed it could increase profits by paying millions of dollars in kickbacks to a physician, under the guise of royalty payments, to increase the use of its products," Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division, said in a statement. "But today’s $16 million settlement makes it clear that its unscrupulous scheme backfired.”
As a part of the settlement, Arthrex agreed to a five-year corporate integrity agreement to ensure compliance with regulations, the release said.
“The Department of Justice will continue to pursue medical device manufacturers that pay kickbacks to boost their profits,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “Such arrangements can improperly influence physicians’ decision-making and result in the misuse of critical federal health care program funds.”
