A $9 million Medtronic settlement has been reached to resolve claims that the company used illegal kickbacks including paying thousands to cover a doctor’s restaurant bills.

Medtronic, a Minnesota-based medical device company, was accused of using an illegal kickback scheme in which the company paid kickbacks in return for a neurosurgeon using the company’s infusion pumps during his spinal surgeries. These actions allegedly violated the anti-kickback statute of the False Claims Act. Medicare fraud and whistleblower lawsuits are serious issues.

The doctor involved in the scheme reportedly hosted over a hundred events at his Brazilian restaurant in Sioux Falls, South Dakota. At his request, Medtronic allegedly covered around $87,000 in meals and alcohol for the doctor’s friends and business partners. In return, the doctor reportedly agreed to use Medtronic’s implantable devices which assist in medication delivery.

The scheme reportedly dates back as early as 2010.

In a deal with the Department of Justice, Medtronic has agreed to pay over $9 million to resolve this issue. $8.1 million of the Medtronic settlement will go towards resolving the False Claims Act allegations. Another $1.11 million of the settlement will resolve allegations that the company failed to properly report payments to the Centers for Medicare & Medicaid Services – thereby violating the Open Payments Program.

“We expect doctors to make medical decisions based on what is best for their patients, not what is best for their bank accounts,” said U.S. Attorney Ron Parsons for the District of South Dakota in a press release regarding the Medtronic settlement.

“The quality of medical care is eroded – and patients and their families suffer – when companies and physicians enter into these sorts of under the table schemes to create illegal financial incentives to increase the use of medical devices.”

Separate allegations have been filed against the South Dakota doctor and two of his companies. These claims are not resolved in the Medtronic settlement.

Medtronic Settlement News

This is not the first settlement that Medtronic has agreed to. For example, in 2014, the company agreed to pay the government to resolve False Claims Act claims. This Medtronic settlement included $9.9 million payments and put an end to claims of illegal kickbacks in connection with the company’s pacemakers and implantable defibrillators.

In 2018, the company again agreed to resolve the claims against them. In the deal, Medtronic agreed to pay nearly $51 million to resolve claims against two of their recently acquired subsidiaries. Legal action against these organizations argues that they had violated the False Claims Act with several actions. For example, the companies allegedly engaged in illegal kickback schemes to encourage doctors to promote their devices.

The settlement included a $17.9 million payment to settle claims surrounding ev3’s Onyx Liquid Embolic System, a $13 million payment to resolve an investigation into a stroke device registry, and a $20 million payment to resolve claims surrounding “various market-development and physician engagement activities conducted by legacy Covidien and ev3 Peripheral Vascular and endoVenous businesses.”

Other FCA Settlements

The Department of Justice regularly reaches deals with companies who have been subject to False Claims Act allegations from a whistleblower. Often times, other state and federal authorities will play a role in these investigations and subsequent settlements. However, a portion of these settlements may be given to the whistleblower plaintiff for their services in the case.

If you work for a pharmaceutical company or work in a healthcare setting and have witnessed Medicare and/or Medicaid fraud, you may be able to file a whistleblower lawsuit. Not only do these claims help hold fraudulent companies accountable, they can also provide significant benefits for plaintiffs.

This article is not legal advice. It is presented
for informational purposes only.