States, feds settle with medical equipment company

Bryan Cohen Mar. 15, 2012, 1:43pm


BALTIMORE (Legal Newsline) - Maryland Attorney General Douglas Gansler announced a multistate settlement on Thursday with a medical equipment company that allegedly provided kickbacks to physicians, violating the False Claims Act.

Gansler joined with the federal government and other states in the agreement with Medtronic Inc., which allegedly provided the kickbacks to encourage physicians to implant Medtronic pacemakers and implantable cardioverter defibrillators in patients. Under the terms of the agreement, Medtronic will pay the federal government and the states a total of $23.5 million. Maryland's portion of the settlement is $9,678.

"This settlement sends the message that tampering with the delivery of medical services carries severe consequences," Gansler said. "Any company that attempts to boost its bottom line using underhanded tactics is asking for a similar outcome."

Between 2003 and 2011, Medtronic allegedly conducted post-market device registries and clinical studies that were actually vehicles to pay kickbacks to physicians who participated in the registries and studies.

The kickbacks allegedly influenced physicians to implant Medtronic ICDs and pacemakers in patients. Medtronic allegedly paid each physician who participated in a registry or clinical studies. Participation in the study or registry allegedly required a new or previous implant of a Medtronic device.

Medtronic allegedly paid physicians a fee that ranged from approximately $1,000 to $2,000 per patient. In addition, Medtronic allegedly handpicked certain physicians for the device registries and clinical studies to either convert their business from a competitor's product or to persuade the physicians to continue their use of Medtronic products.

A team from the National Association of Medical Fraud Control Units made up of members from the attorneys general offices of Florida and New York participated in the case, representing the interests of the states during negotiations with Medtronic.

The settlement resolves allegations contained in two whistleblower lawsuits filed under the False Claims Act's qui tam provisions that are pending in California and Minnesota. The whistleblowers will receive payments of more than $3.96 million from the federal share of the recovery.

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