MASSACHUSETTS
Medical device manufacturer DePuy Synthes, Inc., a subsidiary of Johnson & Johnson, agreed to pay $9.75 million to resolve allegations it violated the False Claims Act, officials stated.
DePuy allegedly paid kickbacks to an orthopedic surgeon based in Massachusetts to induce his use of DePuy products, according to officials.
The settlement announced Friday resolves allegations that DePuy violated the Anti-Kickback Statute (AKS) and caused the submission of false or fraudulent claims to Medicare by paying the orthopedic surgeon kickbacks.
The kicksbacks were in the form of free spinal implants and tools for use in surgeries that the surgeon performed overseas
The kickbacks were used to induce the surgeon to use DePuy products in surgeries performed in the United States, according to federal officials.
As part of the settlement, DePuy has admitted that from at least July 2013 through February 2018, DePuy, acting through certain former sales representatives, gave the Massachusetts surgeon thousands of dollars’ worth of free DePuy implants and instruments, including cages, rods, screws, plates, and surgical instrumentation, that the surgeon used to perform surgeries overseas for patients who were not federal health care beneficiaries.
Of the $9.75 million to be paid by DePuy, approximately $7.23 million will be returned to the federal government, and approximately $2.52 million will be returned to Massachusetts, which jointly funded claims for surgeries involving DePuy devices that were submitted to the Massachusetts Medicaid program.
The AKS prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare and other federally funded programs.
The statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
The claims resolved by the settlement are allegations only, and there has been no determination of liability, officials stated.
“Medical device manufacturers are prohibited from providing free items to induce a physician to use their devices,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.
“Today the United States resolves allegations that DePuy provided over $100,000 worth of free product to a surgeon in order to secure and reward that physician’s continued business,” said U.S. Attorney Rachael S. Rollins for the District of Massachusetts. “Unlawful kickbacks can severely distort medical judgment as well as the market for medical devices. The millions of patients that depend on our healthcare system deserve untainted medical decisions. This settlement reflects our commitment to stamping out illegal kickbacks.”
The lawsuit was originally filed under the qui tam or whistleblower provisions of the False Claims Act by Aleksej Gusakovs, who is a former sales representative for DePuy. Under those provisions, private parties, known as relators, can file an action on behalf of the United States and receive a portion of the recovery.
As part of today’s resolution, Gusakovs will receive approximately $1.37 million.
Tips and complaints about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).
The matter was handled by Senior Trial Counsel Benjamin C. Wei of the Civil Division and Assistant U.S. Attorneys Jessica Weber and Andrew Caffrey for the District of Massachusetts.