A whistleblower who exposed illegal kickback schemes and false claims at Minnesota-based Medtronic Inc. will receive $1.73 million as his share in the government’s nearly $10-million recovery, the U.S. Justice Department said.
Medtronic, a major manufacturer of pacemakers and defibrillators, agreed to pay the U.S. government $9.9 million to resolve allegations brought by Adolfo Schroeder, a former Medtronic employee, under the False Claims Act. The Act’s qui tam or “whistleblower” provisions allow individuals with knowledge of fraud and other wrongdoing targeting U.S. agencies and programs to sue on behalf of the federal government. In return, whistleblowers receive up to 30 percent of the government’s recovery in False Claims cases.
Mr. Schroeder’s lawsuit alleged that Medtronic submitted false claims to Medicare and Medicaid by providing doctors with several types of illegal kickbacks in exchange for sales and recommendations.
According to the complaint, Medtronic paid physicians to speak at events designed to increase the rate of referral business; developed business and marketing plans for physicians at no charge; and provided doctors with tickets to sporting events. The medical device manufacturer also paid doctors to continue using Medtronic devices or to switch their business to Medtronic devices from a competitor’s products, according to the allegations.
“Decisions about devices used to treat cardiac rhythmic disease should be based on the best interests of the patient, not on whether the manufacturer is going to pay a kickback,” said U.S. Attorney Benjamin Wagner. “These sorts of improper financial incentives not only undermine the integrity of medical decisions, they also waste taxpayer funds and are unfair to competitors who are trying to play by the rules.”
The whistleblower case against Medtronic represents the power of the False Claims Act to recover taxpayer funds fraudulently taken from government programs such as Medicare and Medicaid. Since January 2009 the U.S. has recovered more than $19.2 billion through False Claims Act cases. The majority of the money recovered — $13.7 billion — came from whistleblower cases involving fraud against government health care programs.