A medical device company that manufactures and sells a line of heart pumps is offering a settlement of $3.1 million to the U.S. Government to resolve accusations made in a False Claims Act (FCA) lawsuit. The initiator of this complaint will receive a portion of the settlement as a whistleblower award.

The FCA is a law that allows for legal action to be taken by or on behalf of the government for defrauding federal programs—most often Medicare and Medicaid.

It has a qui tam element which allows a private citizen–known as a relator—to start the action and, for doing so, share in the recovered government funds in what is known as a whistleblower award.

In the current case, the relator is a former employee of the medical device company Abiomed Inc., headquartered in Danvers, Mass. The relator will receive a whistleblower award worth $542,500 for their efforts in bringing the alleged fraudulent activity to light.

Abiomed stands accused of essentially bribing physicians through various means to use a line of heart pumps that cost close to $20,000 each. The primary method of luring physicians was allegedly by purchasing lavish meals at world-renowned restaurants located in the cities of Boston, New York, Los Angeles, and Beverly Hills.

The price tag for these expensive dining adventures was often grossly inflated due to the inclusion of spouses and allowance of unlimited consumption of alcohol, according to the U.S. Department of Justice.

Additionally, the DOJ alleges there were frequent documented attendees whose identity could not be verified as legitimate that were listed with the purported intent of lowering the price per head to a reasonable figure.

Nevertheless, the receipts for these outings broke down to as much as $450 per person, which exceeded printed internal corporate guidelines for business meals. The DOJ further accused Abiomed of buying physicians’ meals “in instances where attendees ordered alcohol in an amount inconsistent with legitimate scientific discussion,” according to the department’s press release.

Unfortunately, these costs are passed on to public health programs like Medicaid and Medicare for reimbursement when patients are thus insured.

The Federal Bureau of Investigation (FBI) initiated an investigation of Abiomed Inc. in cooperation with the Department of Health and Human Services Office of Inspector General (HHS-OIG).

According to the press release, HHS-OIG’s Special Agent in Charge Phillip Coyne hopes that cases such as this serve as warnings to medical device and pharmaceutical companies seeking to interfere with the educated deliberation of doctors regarding their product choices.

He also noted that public confidence in a federal healthcare system that allows for such mismanagement of funds is systematically compromised by these actions. It also makes the general cost of medical care inflate exponentially which affects every citizen.

The $3.1 million settlement offered by Abiomed will clear the company of the allegations it has faced with this whistleblower lawsuit. The U.S. Department of Justice will recover $2,557,500 after the whistleblower award of $542,500 for the relator has been subtracted.

The Abiomed Whistleblower Lawsuit is Case No. 1:13-cv-12277 in the U.S. District Court for the District of Massachusetts.