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Medtronic Settles False Claims Act Suit for $75 Million

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Last week, Medtronic agreed to pay $75 million to resolve allegations of Medicare fraud.  The suit, originally brought under the qui tam provisions of the False Claims Act, alleged that Kyphon, a Medtronic subsidiary, defrauded Medicare by improperly persuading hospitals to keep patients overnight for simple outpatient procedures to repair small fissures of the spine.   This fraudulent conduct resulted in Medicare reimbursing hospitals up to $10,000 per procedure when patients were recovering within a few hours, leading to losses of millions of dollars for the Medicare program.  The two whistleblowers who exposed the fraud will receive a total of $14.9 million as their relators’ share of the settlement proceeds. 

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