Biomet, subsidiary, pay over $6 million to resolve whistleblower claims of kickbacks for bone growth stimulators

by Ben Vernia | October 29th, 2014

On October 29, the Department of Justice announced that Biomet, Inc., and its subsdiary, EBI LLC, have agreed to pay $6.07 million to settle allegations initially brought by a whistleblower in a qui tam suit that the company paid physicians kickbacks to use the companies’ bone growth stimulators. According to DOJ’s press release:

EBI LLC, doing business as Biomet Spine and Bone Healing Technologies and Biomet Inc. have agreed to pay $6.07 million to resolve allegations that EBI violated the False Claims Act by paying kickbacks to induce use of its bone growth stimulators and billing federal health care programs for refurbished stimulators, the Department of Justice announced today. EBI is a medical device company located in Parsippany, New Jersey, that sells bone growth stimulators, which are used to repair fractures that are slow to heal. It is a subsidiary of Biomet, which is based in Warsaw, Indiana.

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The United States alleged that, from 2001 to 2008, EBI paid staff at doctors’ offices to influence doctors to order its bone growth stimulators. These payments were allegedly provided pursuant to personal service agreements with staff members. The United States concluded that these payments violated the Anti-Kickback Act and resulted in false billings to various federal health care programs, including Medicare. The settlement also resolves EBI’s disclosure that it received federal reimbursements for bone growth stimulators that had been refurbished.

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DOJ continued that the whistleblower’s share of the settlement has not yet been determined.

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