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Medtronic Pays $23.5M to Settle Kickback Allegations

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Last week, Medtronic Inc., the world’s largest manufacturer of medical devices, agreed to pay $23.5 million to settle two lawsuits alleging that the company paid kickbacks to doctors in an effort to encourage them to implant Medtronic pacemakers and defibrillators in their patients.

The Department of Justice alleged that Medtronic paid physicians between $1000 and $2000 for every patient implanted with a Medtronic defibrillator or pacemaker as a part of post-market studies designed to assess the performance of medical devices after approval by the Food and Drug Administration (FDA). According to the allegations, Medtronic solicited physicians for the studies to encourage them to use the company’s devices which, in turn, caused false claims to be submitted to Medicaid and Medicare.

The settlement resolves two whistleblower lawsuits pending in California and Minnesota which were brought under the qui tam provisions of the False Claims Act.  As part of the settlement, the whistleblowers will receive a portion of the federal government’s share of the recovery totaling more than $3.96 million.

According to Benjamin Wagner, U.S. Attorney for the Eastern District of California, the “settlement highlights one of the key purposes of the Anti-Kickback law – to ensure that the judgment exercised by healthcare providers in treating Medicare and Medicaid patients is not influenced by unlawful payments.”

Medtronic denied any wrongdoing in settling the lawsuit, saying that the settlement is not an admission that any of the studies it sponsored were improper or unlawful.

Medtronic is facing another probe by the Department of Justice and U.S. Senate over concerns that physicians paid by the company may have failed to report side effects of one of its products, Infuse, which is a medical device used in spinal surgery.

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