Covidien settles whistleblowers’ kickback allegations for nearly $17.5 million

by Ben Vernia | March 11th, 2019

On March 11, the Department of Justice announced that Covidien, LP, had agreed to pay nearly $17.5 million to settle civil allegations, originally brought by whistleblowers in two False Claims Act qui tam complaints, that the company provided kickbacks to physicians in California and Florida. According to DOJ’s press release:

Covidien LP has agreed to pay $17,477,947 to resolve allegations that it violated the False Claims Act by providing free or discounted practice development and market development support to physicians located in California and Florida to induce purchases of Covidien’s vein ablation products, the Department of Justice announced today.

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The United States alleged that Covidien violated the Anti-Kickback Statute and, correspondingly, the False Claims Act by providing practice development and market development support to health care providers located in California and Florida from Jan. 1, 2011, through Sept. 30, 2014, to induce those providers to purchase ClosureFASTTM  radiofrequency ablation catheters that were billed to Medicare and to the California and Florida Medicaid programs.  ClosureFastTMcatheters are used in procedures that treat venous reflux disease, a disease often marked by the presence of varicose veins.  The practice and market development support Covidien provided included customized marketing plans for specific vein practices; scheduling and conducting “lunch and learn” meetings and dinners with other physicians to drive referrals to specific vein practices; and providing substantial assistance to specific vein practices in connection with planning, promoting, and conducting vein screening events to cultivate new patients for those practices.

The Anti-Kickback Act prohibits the payment of remuneration to induce the referral or use of items or services paid for by federal health care programs.  Remuneration includes not only cash payments but also offers or payments made “in kind.”

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Under the settlement agreement, Covidien will pay an additional $1,474,892 to California and $1,047,160 to Florida for claims settled by these state Medicaid programs.  The Medicaid program is a jointly funded federal and state program.

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The Government announced that two whistleblowers will receive $3,146,030 (an 18% relators’ share).

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