Consumer Fraud

Medtronic resolves whistleblower lawsuit alleging it promoted device for unapproved uses

whistleblower 2 370x210 Medtronic resolves whistleblower lawsuit alleging it promoted device for unapproved usesMedical device manufacturer Medtronic has agreed to pay $2.8 million to resolve a whistleblower lawsuit alleging that it caused certain physicians to submit false claims to Medicare and other federal health care programs for a medical procedure known as “SubQ stimulation,” the Justice Department said on Friday.

The United States alleged that from 2007 through 2011, Medtronic knowingly caused dozens of physicians in more than 20 states to submit claims to Medicare and TRICARE for SubQ stimulation that were not reimbursable.

In subQ procedures, surgeons place Medtronic’s spinal cord stimulation devices just beneath the skin near an area of pain, most often in the lower back where the devices emit electrical impulses and create a “tingling” sensation intended to alleviate chronic pain.

According to the U.S. Justice Department, which joined the whistleblower case, Medtronic promoted this procedure by arranging to have physician-customers attend “on-site training programs” it sponsored. In these events, Medtronic demonstrated the use of its spinal cord stimulation devices, even though their safety and efficacy had not been established as required by the U.S. Food and Drug Administration (FDA).

“Patients should be able to trust that their health care providers only use – and bill Medicare for – medical procedures that have been shown to be safe and effective,” Department of Health and Human Services Special Agent Scott Lampert, vowing to “pursue medical device makers that ignore requirements designed to protect patient health and federal health care programs.”

The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which authorizes private parties to sue on behalf of the federal government when they witness fraud, waste or abuse. Whistleblowers whose False Claims Act lawsuits lead to a recovery are awarded up to 30 percent of the total amount recovered.

The whistleblower lawsuit against Medtronic was filed by Jason Nickell, who formerly worked as a Medtronic sales representative.  Mr. Nickell will receive $602,000 as his share for exposing the Medtronic scheme and helping the U.S. recover funds taken from Medicare and TRICARE.

Source: U.S. Department of Justice