Medtronic Voluntarily Pays $23.5 million Fine to the U.S. Justice Department; Whistleblowers Crucial

By Rheingold Giuffra Ruffo & Plotkin LLP

A common, yet highly illegal, practice by large medical device manufacturers such as Medtronic is to offer financial kickbacks to doctors who use their products. One way to accomplish this is by “hiring’ doctors to do research studies of patients using a specific Medtronic medical device. Such practices will run amok of public medical insurance, such as Medicare.

The United States alleged that Medtronic submitted false claims to Medicare and Medicaid. This was done in part through post-marketing studies which were ways to pay participating physicians improper kickbacks to induce them to implant Medtronic pacemakers and defibrillators. Although Medtronic collected data and information from participating physicians, each of the studies and registries required a new or previous implant of a Medtronic device in each patient, and in each case Medtronic paid participating physicians a fee ranging from approximately $1,000 to $2,000 per patient. The United States alleged that doctors were convinced to implant a Medtronics device when removing a competitor’s device. The settlement resolved two whistleblower lawsuits filed under the qui tamprovisions of the False Claims Act. The whistleblowers will receive payments totaling more than $3.96 million of the recovery.

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