News

Covidien LP Agrees to Settle Medicare Fraud Lawsuit for $13 Million

DATE: December 5, 2018

PHILADELPHIA, Dec. 5, 2018—Berger Montague is pleased to announce that Covidien LP (“Defendant”) agreed to pay $13 million to resolve a False Claims Act lawsuit filed by Shareholder Shauna Itri on behalf of her client in November 2015. The lawsuit alleges that the Defendant used a post-market registry to pay kickbacks to hospitals and institutions to induce them to use the Defendant’s medical device.

More specifically, as described in the settlement agreement, in November 2013, Defendant’s competitor launched a registry for its mechanical thrombectomy device to pay users of the device to collect certain data about the device.  In response to the threat to the Solitaire device’s market share, Defendant conceived of its own registry, known as the Systematic Evaluation of Patients Treated with Stroke Devices for Acute Ischemic Stroke (“STRATIS”) registry.

For about two years beginning in August 2014, Defendant paid hospitals and institutions that participated in STRATIS a fee each time they used a new Solitaire device and reported certain clinical data to Defendant.  Defendant solicited certain hospitals and institutions for the STRATIS registry in order to convert their business from the competitor’s product and/or persuade them to continue using Defendant’s products, and knowingly and willfully used the STRATIS registry as a means of increasing device sales.

Because of this conduct, the whistleblower alleged that Defendant caused false or fraudulent claims for mechanical thrombectomy procedures using the Solitaire device relating to the STRATIS registry to be submitted to Medicare and Medicaid.

Shauna Itri, counsel for the whistleblower, stated: “We were impressed with the government’s diligence in this case, and we are proud that our client had the strength to come forward and file a complaint.” Itri further added, “Kickbacks and inducements can harm patients and can result in overutilization which drains the federal budget. If you have knowledge of this occurring elsewhere, please contact us.”

For more than a decade, Shauna Itri has represented whistleblowers in False Claims Act lawsuits in state and federal courts throughout the United States. Ms. Itri has also represented tax and securities whistleblowers with claims under the IRS and SEC whistleblower programs.  Ms. Itri received a B.A. and an M.A. from Stanford University, where she captained the University’s Women’s soccer team. She is presently an adjunct professor at Widener Law School, actively involved in pro bono work, and the 2019-2020 President of the Junior League of Philadelphia, Inc.

Berger Montague’s Whistleblower, Qui Tam & False Claims Act Practice Group has represented whistleblowers in matters involving healthcare fraud, defense contracting fraud, IRS fraud, securities fraud, and commodities fraud, helping to return more than $3 billion to federal and state governments. In return, whistleblower clients retaining Berger Montague to represent them in state and federal courts have received more than $500 million in rewards.

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