Medical Device Manufacturers Accused Of Medicare Fraud In Whistleblower Lawsuits

Medical device manufacturers Medtronic, St. Jude Medical, Boston Scientific and four others have been accused of violating the False Claims Act for Medicare fraud over products used in heart procedures called surgical ablation. The whistleblower, or Qui Tam, lawsuits allege that the companies offered doctors illegal kickbacks to use their products for off-label purposes.

Qui Tam lawsuits

The Qui Tam lawsuits allege that the manufacturers found themselves struggling to sell their surgical ablation products (used by surgeons to stop arrhythmias) because the U.S. Food & Drug Administration (FDA) had not approved those products for the treatment of atrial fibrillation, which is a common heart problem.

So, in order to sell the products, manufacturers began offering doctors illegal kickbacks and other incentives to use those products for off-label purposes – and then to over bill Medicare. The complaint, which was only recently made public, states:

Defendants have promoted their products to hospitals by highlighting the high spread between Medicare reimbursement for procedures performed with defendants' products and the relatively low cost of those procedures.

Those actions are violations of the False Claims Act, a federal law which allows people to file actions against federal contractors claiming fraud against the government. Claims under the law are typically filed by those who have insider knowledge of false claims which include health care, military and many other industries.

False Claims Act verdicts / settlements generally large

Violations of the False Claims Act usually command large verdicts and settlements – of which the whistleblower typically recovers 15 to 25 percent. Although the amount of damages in these cases is yet to be determined, the U.S. Justice Department recently disclosed that California based Endoscopic Technologies has agreed to pay the United States $1.4 million to settle the whistleblower lawsuit filed against it. Qui Tam attorneys say that the remaining lawsuits will likely involve even larger damages – leaving the whistleblowers well compensated for their troubles.

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