Metronic pays nearly $10 million to settle physician kickback allegations within days of the expiration of its CIA

by Ben Vernia | May 30th, 2014

On May 28, the Department of Justice announced that Medtronic, Inc., the Minnesota-based medical device company, had agreed to pay $9.9 to resolve allegations originally brought by a qui tam whistleblower that the company paid kickbacks to physicians for prescribing its products. According to DOJ’s press release:

Medtronic Inc., of Fridley, Minnesota, has agreed to pay the United States $9.9 million to resolve allegations under the False Claims Act that the company used various types of payments to induce physicians to implant pacemakers and defibrillators manufactured and sold by Medtronic, the Justice Department announced today.

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The United States alleged that Medtronic caused false claims to be submitted to Medicare and Medicaid by using multiple types of illegal kickbacks to induce physicians to implant Medtronic pacemakers and defibrillators. Specifically, Medtronic allegedly induced physicians to use its products by: 1) paying implanting physicians to speak at events intended to increase the flow of referral business; 2) developing marketing/business development plans for physicians at no cost; and 3) providing tickets to sporting events. The United States alleged that Medtronic paid the remuneration to persuade the physicians to continue using Medtronic products or to convert their business from a competitor’s products.

The government also announced that the whistleblower, a former Medtronic employee, will receive $1.73 million (a relator’s share of approximately 17.5%).

The settlement comes just days before the apparent expiration of a Corporate Integrity Agreement between Medtronic and the Office of Inspector General of HHS. According to the OIG-HHS website, that agreement (typically for five years) was effective on May 31, 2009.

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