Medical technology company settles kickback claims (again).
Medical device maker Biotronik has agreed to pay $12.95 million to resolve allegations that it violated the False Claims Act (FCA) by influencing the submission of false claims to Medicare and Medicaid through kickbacks paid to doctors and trainee programs to promote the use of the company’s implantable cardiac devices (i.e., pacemakers and defibrillators). Biotronik is a Germany-based multinational company specializing in medical device technology. It has a factory and its U.S. headquarters in Lake Oswego, Oregon.
The Federal Anti-Kickback Statute forbids individuals or companies from offering or paying anything of value to encourage referrals of products or services covered by government programs including Medicare. It is intended to make sure that a medical providers’ judgment is not swayed based on inappropriate monetary incentives.
“Paying kickbacks to doctors to influence their selection of medical devices undermines the integrity of federal healthcare programs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When medical devices are used in surgical procedures, patients deserve to know that their device was selected based on quality-of-care considerations and not on improper payments from manufacturers.”
“Kickbacks to doctors are illegal because they impose hidden costs on the health care system and they taint the doctor-patient relationship,” explained Acting U.S. Attorney Stephanie S. Christensen for the Central District of California. “The resolution to this matter concludes a lengthy investigation that demonstrates our commitment to take strong action when patient care takes a backseat to generating profits.”
Special Agent in Charge Timothy DeFrancesca of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), added, “Valuable taxpayer dollars that fund Medicare and Medicaid are meant to support the delivery of health care services most suitable for beneficiaries. The payment of kickbacks to medical providers to impel their use of certain devices can improperly divert those dollars and undermine the quality of care being provided to patients. HHS-OIG remains dedicated to working with fellow law enforcement agencies to safeguard the integrity of federal health care programs and the services they cover.”
The U.S. Department of Justice (DOJ)’s complaint said that Biotronik allegedly “abused a new employee trainee program” by paying physicians for an unnecessary number of trainings and, in some cases, for trainings offering little to no value to trainee participants. The deal also resolves claims that Biotronik violated the Anti-Kickback Statute when it paid for doctors’ “holiday parties, winery tours, lavish meals with no legitimate business purpose and international business class airfare and honoraria in exchange for making brief appearances at international conferences,” according to court documents.
The civil settlement resolves qui tam or whistleblower claims originally brought by Jeffrey Bell and Andrew Schmid, both formerly working as independent sales representatives in Arizona for Biotronik. In 2018, the two sued the company, and the 354-page complaint was unsealed on July 21. They will each receive approximately $2.1 million.
Back in 2014, Biotronik paid the government $4.9 million to settle similar allegations, and in 2019, a cardiology nurse practitioner at Grand Ronde Hospital in Eastern Oregon accused a hospital of covering up a matter in which one of its surgeons implanted more than 100 Biotronik pacemakers would a legitimate medical need.
As part of the current agreement, the company did not admit to any wrongdoing.