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February 24, 2015 Healthcare Fraud

Minnesota-Based Medtronic, Inc. to Settle False Claims Involving Off-Label Marketing

Medtronic, Inc. – a company familiar with false claims allegations – has agreed to pay $2.8 million to settle claims it unlawfully induced physicians and medical practitioners to use its spinal neuromodulation devices to treat conditions not considered by the FDA when the product was granted approval. This dangerous and risky practice is known as off-label marketing and is frequent fodder for False Claims Act liability.

In general, companies are only permitted to market their products or medications for the treatment of conditions considered by the FDA during clinical trials. Otherwise, the practice is considered too dangerous to be marketed to unknowing patients and doctors and, with regard to Medicare, Medicaid, and TRICARE patients, can trigger liability for the company for subsequent claims for reimbursement.

Details of the False Claims Act lawsuit against Medtronic, Inc.

Medtronic, Inc., which is based in Minneapolis, Minnesota, is one of the top-producing manufacturers of medical devices and has been targeted with False Claims Act allegations in the past. In today’s post, we focus on the recent whistleblower lawsuit involving Medtronic’s spinal cord stimulation devices and the misuse thereof, resulting in thousands of instances of intentional false billing for patient services that were not reimbursable. Allegedly, Medtronic marketed its neuromodulation devices for the treatment of chronic back pain and recommended the use of its products for “SubQ” lumbar stimulation – a procedure not approved for use by the FDA.

The stimulation procedures were eventually classified as “investigational procedures” by the Medicare and Medicaid authorities, but only after 20 states submitted thousands of claims for reimbursement for the procedure – all on the recommendation of Medtronic. The procedure uses impulses directed at problem areas to help alleviate pain, which, while successful in some patients, has not been fully evaluated by the FDA and amounted to off-label marketing by Medtronic with regard to government healthcare beneficiaries. Allegedly, Medtronic offered the neurostimulator devices to pain management and orthopedic doctors for discounted rates, and enticed doctors with the promise that offices could increase per-patient profits by $10,000 while only adding mere minutes to patient interaction time.

The case was filed by a former Medtronic sales representative, who is set to receive approximately $600,000 for his willingness to come forward with allegations of off-label marketing.

Government’s comments

In affirming its dedication to eliminating costly healthcare fraud, the government made several comments in the wake of the settlement. The Department of Health and Human Services said in a statement:

“Patients should be able to trust that their healthcare providers only use – and bill Medicare for – medical procedures that have been shown to be safe and effective….Our agency will continue to pursue medical device makers that ignore requirements designed to protect patient health and federal healthcare programs.”

The Justice Department similarly commented, stating:

“Today’s settlement demonstrates our commitment to ensure that beneficiaries of federal healthcare plans, including Medicare recipients and military families, receive medical treatments that have been proven safe and effective….Targeting chronic pain patients with a medical procedure that lacks evidence of clinical efficacy wastes the country’s healthcare resources.”

Contact us to learn more

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