Consumer Fraud

Medical device maker to pay U.S. $4.9 million in whistleblower kickback case

whistleblower Medical device maker to pay U.S. $4.9 million in whistleblower kickback caseBiotronik Inc., an Oregon-based medical device manufacturer, has agreed to pay $4.9 million to resolve allegations made by a whistleblower under the False Claims Act that the company violated federal anti-kickback laws by paying physicians to use devices that it produced and sold.

Former Biotronik employee, Brian Sant, filed a whistleblower lawsuit against the company under the qui tam or “whistleblower” provisions of the False Claims Act, which authorizes private individuals armed with evidence of fraud and other wrongdoing against federal agencies and programs to sue on behalf of the U.S. and share in any recovery.

The U.S. Justice Department said that Mr. Sant will receive about $840,000 for his role in helping the U.S. recover the funds from Biotronik.

The settlement resolves allegations that Biotronik provided kickback payments to doctors, which caused hospitals and ambulatory surgery centers to submit false claims to Medicare and Medicaid for reimbursement.

The Justice Department said the improper payments were intended to encourage doctors to use Biotronik pacemakers, defibrillators, and cardiac resynchronization therapy devices.

Biotronik’s kickback scheme, the U.S. alleged, targeted electrophysiologists and cardiologists practicing in Arizona and Nevada. Biotronik rewarded physicians who continued to use Biotronik devices or switched to Biotronik devices from other brands with inflated payments for membership on physician advisory boards and meals at high-end restaurants.

“Today’s resolution of claims underscores one of the key purposes of the Anti-Kickback law – to ensure that the judgment exercised by health care providers in treating Medicare and Medicaid patients is not influenced by illegal payments,” said U.S. Attorney Benjamin Wagner.

“When medical device manufacturers make improper payments to physicians, they encourage medical decision-making based on financial gain rather than the best interests of patients,” said Acting Assistant Attorney General Joyce Branda. “Today’s resolution demonstrates the Department of Justice’s continuing commitment to ensuring that beneficiaries of federal health care programs receive appropriate medical care.”


U.S. Department of Justice