Medtronic pays $23.5 million to settle kickback allegations

by Ben Vernia | December 13th, 2011

On December 12, the Department of Justice announced that Minnesota-based Medtronic, Inc., had agreed to pay $23.5 million to resolve claims that it used post-market studies of its cardiac devices as a pretext for paying kickbacks to physicians prescribing their use. According to DOJ’s press release:

Medtronic Inc. of Fridley, Minn., has agreed to pay the United States $23.5 million to resolve allegations that it violated the False Claim Act by using physician payments related to post-market studies and device registries as kickbacks to induce doctors to implant the company’s pacemakers and defibrillators, the Justice Department announced today.

Post-market studies are intended to assess the clinical performance of a medical device or drug after that device or drug has been approved by the Food and Drug Administration. Registries are collections of data maintained by a device manufacturer concerning its products that have been sold and implanted in patients.

The United States contends that Medtronic caused false claims to be submitted to Medicare and Medicaid by using two post-market studies and two device registries as vehicles to pay participating physicians illegal kickbacks to induce them to implant Medtronic pacemakers and defibrillators. Although Medtronic collected data and information from participating physicians, each of the studies and registries required a new or previous implant of a Medtronic device in each patient, and in each case Medtronic paid participating physicians a fee ranging from approximately $1,000 to $2,000 per patient. The United States contends that Medtronic solicited physicians for the studies and registries in order to convert their business from a competitor’s product and/or persuade the physicians to continue using Medtronic products.

The case arose from two whistleblower suits – one in California, the other in Minnesota. The relators in those cases will receive $3.96 million from the federal share of the recovery (a 16.8% relators’ share), the government announced.

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