In a recent lawsuit filed under the state of New York’s False Claims Act, a former sales representative for BioMet, which has since merged with Zimmer Holdings, has alleged the company engaged in illegal and unlawful practices when touting its dental implant products. More specifically, the whistleblower’s complaint asserts that the company offered lucrative financial incentives and gifts to physicians willing to recommend and utilize the BioMet devices. This practice is illegal under the False Claims Act in situations involving Medicare and Medicaid patients, as practitioners are to offer unbiased medical advice that is not tied to an expectation of financial gain.
The lawsuit was filed in Ulster County, New York, and is the second illegal kickback case involving BioMet since 2014. At that time, the company remitted $6 million to settle allegations it offered kickbacks to orthopedists in exchange for their promise to recommend and implement the company’s bone graft simulators.[1.Jeff Swiatek, “Zimmer BioMet sued for $10 million by ex-sales rep,” Indy Star, October 23, 2015, http://www.indystar.com/story/money/2015/10/23/zimmer-biomet-sued-10m-ex-sales-rep/74402816/.]
Details of the allegations against BioMet
Launched by a former sales representative for BioMet, the allegations set forth in the whistleblower complaint reveal an alleged corporate culture of unlawful incentivization of medical personnel. Allegedly, the company offered “trips, meals, and other freebies” to dentists and their staff as part of its dental implant marketing strategy. The whistleblower, familiar with the laws against kickbacks, routinely complained to the management about the gift-giving, and was placed on a performance improvement plan (despite being the third-best salesman that year). Shortly thereafter, he was terminated from his position. He asserts that he was wrongfully fired for exposing the unlawful activity.
Representatives for the whistleblower have stated that “he was aware that Biomet allegedly provided money, goods, and services to induce customers — including oral surgeons, dentists, laboratories, hospitals, and educational institutions in Ulster County — to order and use Biomet’s products. Many of these customers subsequently sought reimbursement for these products from the publicly funded Medicaid program, in violation of state and federal laws.”
In addition to the violations of Medicare and Medicaid guidelines, the whistleblower also alleged that his wrongful termination has spurned a dramatic decline in his income, forcing him to relocate and accept a retail sales position at a home improvement store.
For the wrongful retaliation, the whistleblower is seeking damages of at least $10 million. If successful, he could also receive up to 30 percent of the ultimate recovery under the False Claims Act.
Illegal kickbacks and financial incentives have long plagued the Medicare and Medicaid programs, creating an unlawful “taint” on the doctor-patient relationship, in addition to driving up the prices of medication and medical products for everyone. While gift giving was historically an expected and common practice between medical companies and physicians, the practice has been stopped over the past decade in an effort to focus solely on the doctor-patient interaction, which mandates finding the best course of treatment regardless of any underlying expectation of financial gain.