Department of Justice files complaint intervening in two whistleblower suits against SpineFrontier over kickback allegations

by Ben Vernia | March 6th, 2020

On March 5, the Department of Justice announced that it had filed a complaint intervening in two qui tam lawsuits brought by three whistleblowers against SpineFrontier, alleging that the spine device maker caused the submission of claims tainted by the payment of kickbacks. According to DOJ’s press release:

The Justice Department announced today that the United States intervened and filed a complaint in two whistleblower cases filed under the False Claims Act against SpineFrontier, Inc. (SpineFrontier) and related entities and executives, alleging that the defendants paid kickbacks to spine surgeons to induce use of SpineFrontier surgical devices, in violation of the Anti-Kickback Statute (AKS).  According to the United States’ complaint, the defendants paid spine surgeons over $8 million in sham “consulting” payments ostensibly for product evaluations, when in fact the payments were for use of SpineFrontier devices. 

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According to the United States’ complaint, Dr. Kingsley Chin is the founder and Chief Executive Officer of SpineFrontier, a spine device manufacturer headquartered in Malden, Massachusetts, which sells spinal implant devices across the United States.  Dr. Chin is also the founder and principal owner of KIC Management Group Inc. and KICVentures LLC, which own and operate SpineFrontier and Impartial Medical Experts LLC (IME), a purported consulting company.  Vanessa Dudley, Dr. Chin’s wife, was IME’s sole employee.  Adiya Humad is the Chief Financial Officer for KICVentures and SpineFrontier, and president of SpineFrontier. 

The United States’ complaint alleges that from October 2013 through December 2018, the defendants used IME as an intermediary to funnel kickbacks to spine surgeons.  Defendants allegedly created IME to shield themselves and spine surgeons from government scrutiny by creating a false impression that surgeons were consulting through an independent third-party entity.  The United States contends that IME in reality has served only one client — SpineFrontier — and its sole purpose was to pay spine surgeons to use SpineFrontier’s medical devices.  The Defendants generally paid “consulting” spine surgeons $500 for a cervical procedure, and $1,000 for a lumbar procedure — but only if the surgeon used SpineFrontier devices.  The United States alleges that consulting spine surgeons often performed little or no work beyond implanting the devices—for which they were separately paid by insurers — and that the Defendants did not systematically collect or use feedback from consultants and paid them even when they had provided no feedback at all.  Surgeons allegedly could “consult” on SpineFrontier devices in this manner an unlimited number of times so long as they continued using the SpineFrontier product in surgery.

The AKS prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, TRICARE, and other federally funded programs.  The AKS is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. 

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