A whistleblower who accused medical device manufacturer Atrium Medical Corp. of providing kickbacks to doctors for recommending its stents for unapproved uses, then billing Medicare and other government health care programs for those procedures, has helped the U.S. government recover $11.5 million.
The whistleblower, a former Atrium sales representative and territory business manager from 2007 to 2012, sued her former employer in a Texas federal court under the federal False Claims Act, which authorizes private parties to file suit on behalf of the U.S. government in cases of suspected fraud targeting U.S. agencies and programs.
The U.S. investigated the whistleblower’s complaint but declined to participate in its litigation. According to lawyers who handled the case, the Atrium settlement is one of the largest non-U.S.-backed False Claims Act settlements in U.S. history involving a medical device.
The complaint alleged that the Hudson, N.H.-based manufacturer engaged in an extensive nationwide scheme to promote its iCast brand stent for use in the vascular system even though the U.S. Food and Drug Administration (FDA) approved it only for treating tracheobronchial obstructions.
The complaint alleged that Atrium provided physicians with referral dinners, financial grants, and other kickbacks in an effort to induce them to implant the stents in the arteries of elderly patients. Atrium then billed Medicare for the unapproved procedures, the complaint alleged. The lawsuit claimed that the company’s actions violated both the False Claims Act and the Anti-Kickback Statute.
Atrium sold an estimated $382 million in iCast stents from 2007 to 2012, and the whistleblower said she believed nearly 100 percent of those were implanted for unapproved uses. She also claimed that more than 70 percent of those procedures were paid for by Medicare, Medicaid, and the U.S. Department of Veterans Affairs.
Whistleblowers whose False Claims Act complaints result in a recovery for the government are awarded a percentage of the total amount recovered. When the government intervenes in a False Claims Act suit, the whistleblower will reccieve between 15 percent and 25 percent of the amount recovered, depending on “the extent to which the [whistleblower] substantially contributed to the prosecution of the action.”
However, if the government chooses not to intervene, as it did in the case against Atrium, the whistleblower will receive between 25 and 30 percent of the total recovery along with any “reasonable attorneys’ fees and costs.”