The publicly-traded company known as NuVasive, Inc. has agreed to pay $13 million to settle claims[1. “NuVasive To Pay $13.5 Mln To Settle False Claims Act Allegations,” Nasdaq.com, July 30, 2015. http://www.nasdaq.com/article/nuvasive-to-pay-135-mln-to-settle-false-claims-act-allegations-20150730-01919#ixzz3jxGIncjO] it fraudulently induced doctors and healthcare professionals to overbill government programs like Medicare and Medicaid. The company, which is based in California, is known for its design, manufacture, and sale of products used in complex spinal surgeries. Of particular issue in today’s case is the product known as the CoRoent System, which is used to treat severe conditions affecting the spine and neurological system.
The case was first brought to light by a former NuVasive sales representative who did not feel comfortable selling the product pursuant to the demands imposed by NuVasive. Accordingly, the whistleblower is expected to receive $2.2 million in exchange for his willingness to come forward.
Like most False Claims Act settlements, there has been no determination of liability. The federal government will receive $12,583,413.84 of the settlement, and the state Medicaid systems involved will receive the remaining $916,586.16.
The Allegations Against NuVasive, Inc.
The CoRoent System is approved by the Food and Drug Administration (FDA)[2. FDA 510(k) Premarket Notification for CoRoent System, http://www.accessdata.fda.gov/cdrh_docs/pdf7/K071795.pdf] for the treatment of degenerative disc disease and spondylolisthesis. It is an implantable device that works to effectuate intervertebral fusion in skeletally mature patients (adults), and is used with an autogenous bone graft device. It was approved in 2007 specifically for the limited purpose of treating these specific spinal disorders, and was not indicated for use in patients suffering from alternative conditions.
According to the allegations,[3. “Medical Device Manufacturer NuVasive Inc. to Pay $13.5 Million to Settle False Claims Act Allegations.” July 31, 2015. http://www.fiercemedicaldevices.com/press-releases/medical-device-manufacturer-nuvasive-inc-pay-135-million-settle-false-claim-0] for a period spanning from 2008 through 2013, NuVasive instructed its sales representatives to market the CoRoent System for the treatment of conditions outside the scope of the FDA’s express approval. Most notably, sales representatives were instructed to heavily market the product for the treatment of scoliosis, which is a common spinal disorder affecting nearly seven million Americans.[4. Scoliosis Fact Sheet, American Chiropractic Association. https://www.acatoday.org/content_css.cfm?CID=2189] However, the FDA never approved the device for use in this type of patient, and its promotion therefore lead to a triggering of the False Claims Act.
In addition to the off-label marketing allegations, NuVasive is accused of offering illegal remuneration (kickbacks) to physicians willing to implant the device in scoliosis patients. More specifically, NuVasive is alleged to have created a sham organization known as the Society of Lateral Access Surgery (SOLAS), which it then used to sponsor speaker fees, honoraria, and physician attendance at its events.
The U.S. Attorney’s Office said in a statement, “Health care providers need to be free to make medical decisions without improper influence by material or incentives from manufacturers….A medical device manufacturer violates the law if it knowingly causes physicians to use its products for purposes that are not medically reasonable and necessary and to bill federal health insurance programs.”
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If you are concerned about suspicious practices at your place of employment or believe your healthcare provider may be engaging in unlawful misconduct, be sure to contact Berger Montague right away.