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Medtronic Settles Kickback Funds Lawsuit for $9M

Medtronic settles allegations that it paid kickbacks to a neurosurgeon to use its products.

The U.S. Department of Justice (DOJ) has announced Medtronic USA Inc. is set to pay $9 million to settle a allegations it issued kickback payments to neurosurgeon Wilson Asfora, MD.  The settlement terms include $8.1 million for violating the False Claims Act, paying kickbacks to Asfora, of South Dakota, to bribe him into agreeing to help market its products by using them on his patients.  The remaining $1.1 million settlement is tied to allegations of violating the Open Payments Program for sending false billing reports to the U.S. Centers for Medicare & Medicaid Services (CMS).

“We expect doctors to make medical decisions based on what is best for their patients, not what is best for their bank accounts,” Ron Parsons, US attorney for the District of South Dakota, said, adding, “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.”

Photo by Emilio Takas on Unsplash

The DOJ probe found that over a 9-year period Medtronic purposely paid for more than 100 sponsored events at a restaurant owned by Asfora in an effort to convince him to use implantable SynchroMed II infusion pumps in his patients.  Asfora allegedly requested the location and guest list for these events.

“Directly or indirectly paying anything of value to induce the referral of items or services covered by Medicare, Medicaid, TRICARE, and other federal healthcare programs, is a violation of the Anti-Kickback Statute,” Parsons said.

The Open Payments Program was designed to “promote transparency and accountability within the field,” Brenna E. Jenny, deputy general counsel for the U.S. Department of Health and Human Services and chief legal officer of CMS, said. “CMS looks forward to continued partnership with the Department of Justice to resolve allegations of manufacturers skirting their Open Payments obligations.”

A separate lawsuit filed by the U.S. in November contends Asfora also received kickback payments to use certain spinal surgery implants.

“Kickbacks undermine the integrity of federal healthcare programs and increase costs borne by taxpayers,” Jeffrey Bossert Clark, acting assistant attorney general of the DOJ’s Civil Division, added.  “The settlement shows the Department’s “commitment to ensure that medical device manufacturers do not use improper financial relationships to influence physician decision-making.”

As part of the resolution, Medtronic agreed to cooperate with further investigations, including any outstanding lawsuits related to kickback payments and other issues.  The company released a statement, saying, “Medtronic has reached an agreement to settle civil claims with the Department of Justice in connection with the actions of a small number of sales personnel.  The company will make a payment of $9.2 million to resolve the matter.  Outside of a small number of sales employees, DOJ’s investigation did not find that Medtronic was aware of this alleged misconduct at the time it occurred.  Upon investigation of this conduct, which violated the company’s policies, Medtronic took various remedial steps, including termination and other disciplinary action against employees directly or peripherally involved, and enhancing relevant training.  The settlement agreement contains no admission of liability. Medtronic remains committed to maintaining the highest standards of ethical conduct and compliance with all applicable regulatory guidelines.”

Sources:

Medtronic to Pay $9.2M Settlement for Kickbacks, False Reports

Medtronic to Pay Over $9.2 Million To Settle Allegations of Improper Payments to South Dakota Neurosurgeon

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