New Jersey-based Biomet, Inc. has agreed to pay $6.07 million to settle False Claims Act allegations involving kickbacks pertaining to its bone growth stimulator products. Under the False Claims Act, any medical device manufacturer, drug company, hospital, or medical professional may face possible liability if Medicare or Medicaid patients are referred to a service, procedure, or course of treatment in exchange for financial gain or other incentives provided to the referral source. In today’s case, the allegations against Biomet include inappropriate financial relationships, unlawful inducements, and kickback schemes in violation of the False Claims Act’s federal Anti-Kickback Statute.
Details of case against Biomet, Inc.
Biomet, Inc., also known as Biomet Spine, Bone Healing Technologies, and EBI, LLC, is based in Parsippany, New Jersey. The company manufactures bone growth stimulators. These devices are used to repair bone fractures that are healing slowly. According to the allegations, for a period spanning from 2001 through 2008, EBI, LLC paid various staff members of doctors’ offices a sum of money in exchange for the promise to try and influence doctors to order bone growth stimulators from the company. The payments to these staff members were made pursuant to a personal services contract between EBI and the medical professionals, which is decidedly a violation of the Anti-Kickback Act. Any bone growth stimulators purchased by doctors as a result of this arrangement would be considered a prohibited act if the patient using the stimulator is a recipient of government healthcare benefits under either Medicare or Medicaid. In addition, EBI faced allegations that it billed the government for new bone growth stimulators when in fact the machines were refurbished, used models.
The whistleblower in this case was a former employee of EBI, LLC. Her share of the settlement amount has not been immediately disclosed; however, it is not uncommon for whistleblowers to receive up to 30 percent of the ultimate recovery.
The federal government has been targeting healthcare fraud for several years, and maintains its aggressive position against this wasteful form of abuse. Acting Deputy Assistant Attorney General August Flentje said in a statement, “Medical device companies must not use improper financial incentives to influence the decision to use their products….This settlement demonstrates the department’s commitment to protect patients, and the taxpayers who fund their care, by ensuring that medical decisions are based on the patients’ medical needs rather than the financial interests of others.”
U.S. Attorney Carmen M. Ortiz commented, “This settlement demonstrates our resolve in ensuring that patients receive, and the government pays for, health care that is based on sound medical judgment, and not compromised by kickbacks….” Likewise, Special Agent Phillip Coyne remarked, “Kickbacks taint medical decision-making, cause over-utilization of services, and lead to increased taxpayer and patient costs….These improper inducements have no place in government health programs relied on by millions of Americans.”
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