Medtronic, the medical device manufacturer of pacemaker, defibrillators and the artificial bone growth product known as Infuse settled claims filed against it under the False Claims Act brought by the United States Department of Justice (DOJ) for $23.5 million. The False Claims Act (FCA), 31 U.S.C. §§ 3729 – 3733 was enacted in 1863 by a Congress over concerns that suppliers of goods to the Union Army during the Civil War were defrauding the Army. This law was passed during the Lincoln administration and is sometimes referred to as the “Lincoln Law.”
The specific allegations made by the DOJ against Medtronic were that it illegally paid doctors kickbacks to select its products rather than the competitor’s. In addition, the DOJ asserted that Medtronic also falsified Medicare and Medicaid claims by using post-market studies as well as two separate device registries as a way to part illegal kickbacks directly to doctors to implant Medtronic devices.
Post-market studies are supposed to be used to assess the safety and effectiveness of medical devices and drugs after receiving FDA approval; and device registries are internal data collection efforts maintained by manufacturers once their devices have been sold and implanted in patients.
The investigation performed by the combined efforts of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Minnesota, the U.S. Attorney’s Office for the Eastern District of California, the Office of Inspector General at the U.S. Department of Health and Human Services and FBI found that Medtronic in an effort to induce doctors to use their implants and then report the findings to its data registry, paid each doctor $1,000 to $2,000 per patient.
According to a press release on the DOJ website, Tony West the Assistant Attorney General for the Civil Division said, “Kickbacks, like those alleged here, distort sound medical judgments with financial incentives paid for by the taxpayers.”
Qui Tam: Medtronic False Claims Settlement
This kind of settlement is called a qui tam or “whistleblower” claim. This happens when a person comes forward with evidence that a company is committing a fraud against the government. Qui Tam cases are an important way to detect, investigate and prosecute cases of fraud. Qui Tam cases are pursued under the False Claims Act (FCA) and can be brought by any person or organization (and even a governmental agencies) that alleges that a fraud has been committed.
Knowingly Submitting a False Claim: 53% of Penalties Have Gone to Big Pharma
One does not violate the FCA by accidentally submitting a false claim to the government; rather the person must know that they are submitting a fraudulent claim. That is why the majority of Qui Tam cases are brought against pharmaceutical and medical device manufacturers accounting for more than 25% of all FCA cases compared to 10% for the defense industry. Four companies (GlaxoSmithKline, Pfizer, Eli Lilly, and Schering-Plough) accounted for more than half (53 percent or $10.5 billion) of all financial penalties imposed over the past two decades. These leading violators were among the world’s largest pharmaceutical companies.
Most of the infractions, and the single largest category of financial penalties, stem from the promotion of off-label drugs and medical devices. The off-label promotion of a drug or medical device can lead to criminal prosecution because of the potential serious adverse health consequences for patients. In addition, overcharging for drugs under Medicare or Medicaid also violates the FCA.
$3 Billion Dollars in Settlements in 2012
In 2012, the Federal government won or negotiated over $3.0 billion in health care fraud judgments, settlements and administrative fines. As a result of the DOJ’s efforts, approximately $4.2 billion was deposited with the Treasury or Centers for Medicare & Medicaid Services (CMS) and to private persons during the fiscal year.
The attorneys at Aronfeld Trial Lawyers, have dedicated themselves to the public’s safety and by advocating on behalf of the injured for more than twenty years. Our personal injury law firm has represented people in over 5,000 significant catastrophic personal injury and wrongful death cases across the country. If you believe you have a potential whistleblower or qui tam case, please email me, Spencer Aronfeld or call our office at 1-866-597-4529 or 305-441-0440 today for a free legal consultation.
