Biotronik settles kickback allegations for $12.95 million

by Ben Vernia | July 25th, 2022

On July 22, the Department of Justice announced that Oregon-based Biotronik, Inc., had agreed to pay nearly $13 million to settles two whistleblowers’ charges that the company paid kickbacks to doctors to use the company’s products. According to DOJ’s press release:

Biotronik Inc. (Biotronik), a medical device manufacturer based in Oregon, has agreed to pay $12.95 million to resolve allegations that it violated the False Claims Act by causing the submission of false claims to Medicare and Medicaid by paying kickbacks to physicians to induce their use of Biotronik’s implantable cardiac devices, such as pacemakers and defibrillators.

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The Federal Anti-Kickback Statute prohibits offering or paying anything of value to induce referrals of items or services covered by Medicare and other federally funded programs. The statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives.

The settlement announced today resolves allegations that Biotronik engaged in a kickback scheme to pay certain favored physicians to induce and reward their use of Biotronik’s pacemakers, defibrillators and other cardiac devices. In particular, Biotronik allegedly abused a new employee training program by paying physicians for an excessive number of trainings and, in some cases, for training events that either never occurred or were of little or no value to trainees. Biotronik allegedly made these payments despite concerns raised by its own compliance department, which warned that salespeople had too much influence in selecting physicians to conduct new employee training and that the training payments were being over-utilized. The settlement also resolves allegations that Biotronik violated the Anti-Kickback Statute when it paid for physicians’ holiday parties, winery tours, lavish meals with no legitimate business purpose and international business class airfare and honoraria in exchange for making brief appearances at international conferences.

Medicaid is funded jointly by the states and the federal government. The States of Arizona, California, Illinois, Missouri and Nevada paid for a portion of the Medicaid claims at issue and will receive a total of approximately $933,400 from the settlement with Biotronik.

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The relators, both former independent sales representatives for the company, will share $2.1 million of the settlement (a 16.2% relators’ share).

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