A heart surgery device manufacturer has agreed to pay $8 million to settle a whistleblower lawsuit, with allegations of faulty marketing reports and physician kickbacks.

The qui tam action alleged Cardiovascular Services Inc. (CSI) provided physician kickbacks to doctors who used their products and provided positive reviews.

While using these devices, doctors would charge federal health programs to use the heart surgery device, according to the whistleblower lawsuit.

Cardiovascular Services Inc. manufacturers medical devices used in certain cardiovascular surgeries, with devices used to unblock restricted arteries using a sanding method to break apart plaque.

The Minneapolis-based company agreed to the settlement as well as to implement a five year compliance program in a North Carolina federal court.

By agreeing to these terms, Cardiovascular Services is able to end the whistleblower lawsuit, which was brought forward by a former CSI sales manager.

“Doctors are expected to provide medical advice and treatment options that benefit patients, not their own practice. The type of kickback scheme alleged in this case compromises good medical care and can lead to inefficient use of limited health care resources,” Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina stated.

Overview of Whistleblower Lawsuit Allegations

Whistleblower Travis T., an employee of Cardiovascular Services Inc. between 2012 and 2013,  reported the company offered physician kickbacks to doctors who used their devices and would promote CSI devices for off label purposes.

Even though the settlement did not mention the off-label marketing promotion claims, government investigators had stated they found evidence indicating CSI had been giving physician kickbacks who used their products while expanding their practices.

The federal government stated that such marketing support could be defined as unlawful kickbacks, because the physicians using the devices were charging Medicare and Medicaid for their services. This is in direct violation of the Fair Claims Act, under which Travis filed the whistleblower lawsuit.

The United States government agreed that Travis should be awarded 25% of each payment made by Cardiovascular Services Inc., as part of the settlement.

Whistleblowers, also called relators, are individuals who have witnessed some form of fraud against the United States government. Whistleblowers can be a current or former employee, a competitor, or another contractor or subcontractor who may have witnessed alleged fraud against the government.

These individuals can then file a whistleblower lawsuit, also called qui tam lawsuit, as long as they are the original source of the allegations and they do so by hiring a specialized lawyer.

In exchange for coming forward and reporting the fraud, whistleblowers can often receive 15% to 30% of whatever qui tam action settlement is recovered.

Medicaid and Medicare fraud are some of the most common forms of government fraud occurring in the country, with any whistleblower lawsuit having the potential to defraud millions of tax payer dollars.

Cardiovascular Services Inc.’s senior director of communications Jack Nielsen pointed out that the government made no allegations of patients being harmed from any of the procedures or the devices, and denies all of the allegations made in the settlement.

As part of the qui tam action settlement, Cardiovascular Services Inc. did not make any admissions to the alleged kickback system.

The Cardiovascular Services Inc. Whistleblower Lawsuit is Case No. 3:13-cv-00404, in the U.S. District Court for the Western District of North Carolina.