Spinal Surgeon Pays Millions to Settle False Claims Act Allegations

An Elkhart, Indiana-based spinal surgeon has agreed to pay $2.6 million to settle allegations under the False Claims Act. The surgeon and Texas-based Omni Surgical, L.P. were allegedly engaged in an unlawful kickback scheme in violation of the False Claims Act’s anti-kickback provisions. In general, any claim for reimbursement to a government healthcare agency (e.g., Medicare, Medicaid or Tricare) that arose due to an inappropriate financial arrangement between one or more healthcare providers could trigger False Claims Act liability for all parties involved. As is reiterated by the government following most resolutions of the kickback allegations, patients deserve honesty and candor from their provider, and should be not be referred to certain clinics or physicians based on an underlying financial arrangement.

Details of case against doctor & device maker

According the Department of Justice, who announced the settlement on August 29th, spinal surgeon Jamie Gottlieb was engaged in a complex network of financially beneficial agreements with Texas-based Omni Surgical with regard to the latter’s provision of spinal surgery products to Gottlieb’s “i-Spine Institute.” The investigation into the matter began more than five years ago following the execution of a search warrant by federal U.S. Marshalls into Gottlieb’s clinic, personal home, and the home of his administrator.

According to the Department of Justice, Gottlieb was allegedly receiving inappropriate financial compensation for his use of Omni’s “Spine 360” products in the performance of spinal surgery. The arrangement between Omni and Gottlieb was apparently solidified through the use of complex intellectual property agreements, which were eventually revealed to be sham documents intended to hide the underlying kickback scheme. The kickback scheme was allegedly ongoing for a period of two years, spanning from 2007 through 2009.

While Gottlieb’s administrator was originally targeted in the execution of the search warrants, he has not been named in the suit and has reportedly not faced liability under the False Claims Act.

Government’s response to allegations of unlawful kickbacks

The United States Attorney for Northern Indiana declined to comment on the litigation. However, Assistant Attorney General Stuart F. Delery reiterated the government dedication to eliminating improper financial relationships between healthcare providers, which can presumably alter a doctor’s judgment when offering treatment options to patients.

More specifically, Delery commented that “[i]n addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make healthcare more affordable.”

Since 2009, the False Claims Act has allowed federal authorities to collect over $22 billion from perpetrators of fraud – half of which has derived from cases involving healthcare fraud.

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By | 2018-09-24T15:31:24+00:00 September 17th, 2014|Healthcare Fraud|