Medical Device Manufacturer Biotronik Settles False Claims Act Allegations for $4.9 Million

Biotronik, Inc., a medical device manufacturer, has agreed to pay $4.9 million to settle claims it unlawfully engaged in kickback schemes and prohibited financial arrangements in violation of the False Claims Act and its terms forbidding kickback schemes pertaining to Medicare and Medicaid patients. The company settled with the Department of Justice in May, 2014, and has not admitted to any liability in the matter. The whistleblower, a former Biotronik employee, is set to receive $840,000 in exchange for his willingness to come forward.

Out of the $4.9 million settlement, $4.66 million is allocated for repayment to the federal government and $200,000 is to be divided amongst affected state Medicaid programs.

Details of Case Against Biotronik

Biotronik is an Oregon-based designer and manufacturer of cardiovascular medical devices, including defibrillators and pacemakers. According to allegations, between January 2006 and December 2011, the defendant engaged in conduct calculated to induce electrophysiologists and cardiologists to purchase several of its Cardiac Rhythm and Disease Management (CRDM) devices through the use of complex kickback schemes and financial incentives. More specifically, the defendant is alleged to have offered doctors meals at “expensive restaurants,” memberships in physician advisory boards, and reimbursement for work done on such boards despite a complete lack of any evidence of work performed.

In exchange for these inducements, doctors and healthcare professionals agreed to exclusively use Biotronik’s CRDM devices when treating patients suffering from various heart-related issues. The allegations center on misconduct occurring in medical practices in Nevada and Arizona, and specifically pertains to claims made for CRDM devices implanted in Medicare and Medicaid patients.

Government’s Response

In keeping with its dedication to eliminating wasteful healthcare fraud, the federal government responded with satisfaction over the settlement agreement between the Department of Justice and Biotronik. Specifically, Acting Assistant Attorney General Joyce R. Branda stated:

“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….Today’s resolution demonstrates the Department of Justice’s continuing commitment to ensuring that beneficiaries of federal healthcare programs receive appropriate medical care.”

U.S. Attorney Brian Wagner of the Eastern District of California also remarked:

“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….”

The settlement with Biotronik is one of dozens of similar settlements occurring so far in 2014 pursuant to the recently-assembled H.E.A.T. Task force. This group, which is focused on the detection, prosecution, and deterrence of fraud against programs like Medicare and Medicaid, was formed in 2009 and has since recovered over $23 billion in wasteful healthcare fraud.

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